Best Fund Provider Emerging Market Equity
Goldman Sachs Asset Management
Best Fund Provider – Emerging Market Equity
Hiren Dasani
managing director, co-head of global emerging markets equity, Goldman Sachs Asset Management – Singapore
“GSAM has been managing dedicated emerging markets equity mandates since 1995, recognising the tremendous growth potential. The GS Emerging Market Equity Portfolio’s investment philosophy is based on the belief that sustainable excess returns can be generated through in-depth fundamental research, alongside a thorough understanding of local markets. This has enabled us to have a strong track record of alpha generation.
Our investment team, composed of over 30 dedicated investment experts, is based in five different locations across the globe, and its profound experience and knowledge allows us to find high or improving quality companies with strong management teams and sustainable return profiles that are available at attractive valuations.
This expertise has driven the team’s success in investing across a range of sectors and market capitalisations. The portfolio maintains a meaningful exposure to small and mid-caps, as well as off-benchmark names to take advantage of these less-efficient parts of the market.
Finally, our rigorous approach to risk management — which aims to drive risk from our stock-level decisions and focuses on maintaining a balanced portfolio at all times — has been the key driver of our consistent performance across different market environments.”
Winners rationale
Benefiting from rapid industrialisation, urbanisation and the adoption of new technologies, emerging markets should make a good source of potentially long-term returns. Yet, because of their lower market efficiency and their high divergence in equity performance, only the active stock pickers who can identify emerging market winners stand to benefit. And here, Goldman Sachs Asset Management truly exhibited its strength in 2019.
As a fundamental bottom-up stock picker, the firm’s locally based research and investment team was vital to its success, thanks to its strong on-the-ground knowledge and expertise across different emerging countries and sectors.
Worth noting, Goldman Sachs Asset Management’s presence was spread across emerging markets, such as Brazil, Hong Kong, and India. This allowed it to conduct over 4,000 company meetings per year and obtain direct and timely access to corporate information.
With a strong value and fundamental bias, the team performed in-depth valuation analyses, finding companies that were trading at a substantial discount to intrinsic value.
As the firm’s flagship strategy, the emerging market equity portfolio invested in all market caps with meaningful exposure to those off-benchmark and less researched names, resulting in high active share as well as strong alpha generation. The results speak for themselves, as the strategy outperformed MSCI EM index by 4.58%, 1.89%, and 3.51% respectively over the past one, three and five years annualised, as of end August 2019.
The success of the firm was reflected too in its fund gathering capabilities. In 2019, over US$400 million was raised for this strategy, even though investor risk sentiment had been dented by the headwinds of an economic slowdown and geopolitical tensions.
The asset manager’s best-in-class investment approach and thoughtful risk management framework, along with a superior level of customised service, earned it the title of Asian Private Banker’s Best Fund Provider – Emerging Market Equity.
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