Doddington Emerging Markets Fund LLC
A high conviction global emerging market equity strategy which combines fundamental bottom-up research with valuation discipline.
Investment objective
The Fund seeks to achieve over the long term a total return in excess of that of the MSCI Emerging Markets Index (with net dividends reinvested) through investment in a concentrated portfolio of 15-25 equity securities of companies in emerging markets, and from other markets where it can be demonstrated by the Investment Advisor that the company concerned is overwhelmingly an emerging market related company. The approach is focussed on valuations and bottom-up fundamental research of individual companies.
Fund particulars
| Launch date | 01 July 2011 |
| Fund size | US$441.8m |
| Domicile | USA |
| Structure | LLC |
| Base currency | USD |
| Dealing | Monthly |
| Min. investment | US$3,000,000 |
| Management fees | 0.90% per annum |
| TER | 1.03% per annum |
| Benchmark | MSCI Emerging Markets |
Portfolio manager
Tom Taylor
Tom Taylor
Tom joined OP in June 2008 from Alta Advisers Ltd. In 1999 he joined Alta Advisers, then headed by Richard Oldfield, and was responsible for managing emerging market equities portfolios. Before this he was an investment analyst at Adam & Co., based in Edinburgh. He graduated from St. Andrews University and Stirling University. He manages the emerging market portfolios and contributes to the overall investment selection.
Latest publications
Latest publications
Emerging Market Equities Strategy
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Commentary
The valuation case for emerging market equities remains attractive, and the MSCI Emerging Markets Index continues to trade below its longer term historic average valuation. Value investing in emerging market equities had a tough year and we underperformed the benchmark by a wide margin. The backdrop for emerging markets remains unsettled and is dominated by global monetary policy actions, numerous political issues, and ongoing trade disputes leading to fallout across the global economy and equity markets.
The bottom performers by contribution in the month were First Pacific and Buenaventura. First Pacific (Hong Kong listed diversified holding company) had bad news as one of its holdings in the Philippines, Metro Pacific, had its water investment concession questioned by the President. Regulatory uncertainty in the Philippines is not new for Metro Pacific and has been a sore point since the election of President Duterte and his strongman style of leadership. Past disputes have been resolved satisfactorily once the political noise has faded and legal process engaged. Buenaventura (Peruvian miner) has been undergoing a ‘debottlenecking’ exercise in some of its key mines to reduce costs, which will yield positive long-term results, but near term has led to it missing out on the recent strength in the gold price. This is unfortunate timing but maintaining cost competitiveness is admirable.
The top performers by contribution in the month were Petrobras, Samsung Electronics, and Embraer. Samsung Electronics (Korean electronics manufacturer) is anticipating a turn in the semiconductor cycle and a margin boost in the handset division. The company is well positioned to retain its leadership in semiconductors as we exit the recent down cycle and hard-won industry rationalisation should allow a solid upcycle. Embraer (Brazilian aircraft manufacturer) had been expecting to complete the deal with Boeing by year end, but the European Union has indicated that it wishes to investigate the competitive market impact, which will delay completion by up to a quarter. We expect the deal to be approved. Petrobras (Brazilian oil producer) benefited from the strong oil price in December with Middle East tensions underpinning fears of a supply disruption. The proceeds from the settlement of the 2014 class action against Petrobras were paid during the month.
Total assets for the emerging markets strategy are now slightly over US$1billion, which is our capacity limit. If you are interested in making a new investment or adding to an existing holding, we therefore request that you contact us to discuss this.