Emerging Markets Opportunities Equity Strategy

Investment Strategies

Be at the Forefront of Opportunity

  • Attractive Historical Returns — Emerging markets have demonstrated favorable historical returns over long-term periods.1
  • Diversification Benefits — Given their broad range of economic environments, currencies and political systems, we believe emerging markets offer a compelling diversification alternative to U.S. and international markets.
  • Appealing Valuations — Despite their increasing popularity, emerging-market stocks still trade at a discount to developed-market stocks, making the asset class potentially well-positioned for the long term.2

Expand Your Exposure with Confidence

  • Disciplined Value Process — Contrary to perception, value stocks (i.e., those with low price-to-book ratios) have outperformed growth stocks (i.e., those with higher price-to-book ratios) over the long term in emerging markets.3
  • Flexible Investment Approach — We maintain the flexibility to pursue value opportunities beyond what are included in the benchmark, such as in frontier markets and in developed-market companies with significant economic exposure to  emerging markets.
  • Experience — Brandes is one of the pioneers in emerging- markets value investing, pursuing opportunities in EM for over 30 years as a firm.

Partner with a Pioneer in Global Value Investing

  • Experienced Professionals — The Investment Team is composed of experienced professionals who have navigated many market cycles.
  • Commitment to Transparent, Easy to Understand Investment Process — The firm consistently applies a Graham-and-Dodd, value-investing approach centered on a research-driven process of purchasing potentially undervalued companies with the goal of capturing future price appreciation.
  • Independent Point of View — Brandes Investment Partners is a 100% employee owned firm and its strategies are unhindered by sales quotas or any outside influence that may impede the firm’s pursuit of investment management excellence.

Past performance is not a guarantee of future results.

Diversification does not assure a profit or protect against a loss in a declining market. No investment strategy can assure a profit or protect against loss.

1Source: FactSet as of 6/30/2015.Annualized 10-yr and 15-yr (8.2%) returns: 8.5% and 8.2%, respectively, for emerging markets; and 6.4% and 3.5%, respectively, for developed markets. Emerging markets represented by the MSCI Emerging Markets Index; developed markets represented by the MSCI World Index. Past performance does not guarantee future results. One cannot invest directly in an index.

2Source: FactSet as of 6/30/2015, based on price ratios such as price-to-book, price-to-earnings and price-to-cash flow. Emerging markets represented by the MSCI Emerging Markets Index; developed markets represented by the MSCI World Index.

3Sources: Worldscope via FactSet, The Brandes Institute, as of 6/30/2014 “Value vs. Glamour: A Long-Term Worldwide Perspective,”

Using data from 1980 to 2014, the study showed that over the long term, a value premium was evident across regions. The emerging market sample consisted of publicly traded companies domiciled in countries not categorized as developed countries (excluding the smallest 50% of companies). Stocks were first divided into 10 deciles based on price-to-book.  Aggregate performance of each decile was tracked over the next five years. This process was then repeated each year. For emerging markets stocks decile 10 value stocks outperformed decile 1 glamour stocks by an average annualized rolling five-year return of 15.13% as measured by their price-to-book ratios. Past performance is not a guarantee of future results.

The MSCI Emerging Markets Index with net dividends captures large and mid cap representation of emerging market countries. Data prior to 2001 is gross dividend and linked to the net dividend returns.  

The MSCI World Index captures large and mid cap representation of developed markets.

MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products.

International and emerging markets investing is subject to certain risks such as currency fluctuation and social and political changes, differences in financial reporting standards and less stringent regulation of securities markets which may result in greater share price volatility; such risks are increased when investing in emerging markets. Additional risks associated with emerging markets investing include smaller-sized markets, liquidity risks, and less established legal, political, social, and business systems to support securities markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies have experienced, and may experience in the future, substantial fluctuations or a steady devaluation relative to the U.S. dollar.

This material is intended for informational purposes only. The information provided in this material should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any security transactions, holdings, or sectors discussed were or will be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance discussed herein. Portfolio holdings and allocations are subject to change at any time. Strategies discussed herein are subject to change at any time by the investment manager in its discretion due to market conditions or opportunities. Market conditions may impact performance.

The Brandes Emerging Markets Opportunities Equity Strategy seeks long-term capital appreciation by investing primarily in equity securities of emerging country issuers, frontier country issuers, and developed-market companies with material exposure to developing markets whose equity market capitalizations exceed $5 billion at the time of purchase. 

The strategy benchmark is the MSCI Emerging Markets Index.

In September 2016 the strategy benchmark changed from gross of withholding tax to net of withholding tax, effective back to the inception date of the strategy. The change was made to better reflect our expectation for an investor’s actual experience.

GIPS® Compliant Presentation:

Annualized Performance (Net)

THROUGH December 31, 2017 | REPORTING CURRENCY: USD
 
1 Year
2 Years
3 Years
4 Years
5 Years
Since Inception 9/30/2011
Emerging Markets Opportunities Equity
26.83%
25.07%
7.48%
2.70%
4.71%
6.93%
Primary Benchmark (a)
37.28%
23.55%
9.10%
6.16%
4.35%
7.01%
Relative Performance
-10.45%
1.52%
-1.62%
-3.46%
0.36%
-0.08%

Annualized Performance (Gross)

THROUGH December 31, 2017 | REPORTING CURRENCY: USD
 
1 Year
2 Years
3 Years
4 Years
5 Years
Since Inception 9/30/2011
Emerging Markets Opportunities Equity
28.11%
26.33%
8.56%
3.77%
5.82%
8.17%
Primary Benchmark (a)
37.28%
23.55%
9.10%
6.16%
4.35%
7.01%
Relative Performance
-9.17%
2.78%
-0.54%
-2.39%
1.47%
1.16%

Annual Periods (Net)

THROUGH December 31, 2017 | REPORTING CURRENCY: USD
 
2017
2016
2015
2014
2013
2012
Emerging Markets Opportunities Equity
26.83%
23.33%
-20.62%
-10.40%
13.14%
15.21%
Primary Benchmark (a)
37.28%
11.19%
-14.92%
-2.19%
-2.60%
18.22%

Quarterly Performance (Net And Gross)

THROUGH December 31, 2017 | REPORTING CURRENCY: USD
Year
 
1Q
2Q
3Q
4Q
YTD
2017
NET
GROSS
Primary Benchmark (a)
-0 10.03%
-0 10.31%
-0 11.44%
-00 2.77%
-00 3.03%
-00 6.27%
-00 9.63%
-00 9.90%
-00 7.89%
-00 2.31%
-00 2.57%
-00 7.44%
-0 26.83%
-0 28.11%
-0 37.28%
2016
NET
GROSS
Primary Benchmark (a)
-0 11.20%
-0 11.48%
-00 5.71%
-00 1.35%
-00 1.60%
-00 0.66%
-00 8.43%
-00 8.71%
-00 9.03%
-00 0.92%
-00 1.17%
00 -4.16%
-0 23.33%
-0 24.57%
-0 11.19%
2015
NET
GROSS
Primary Benchmark (a)
00 -3.37%
00 -3.13%
-00 2.24%
00 -0.32%
00 -0.07%
-00 0.69%
0 -18.77%
0 -18.57%
0 -17.90%
-00 1.46%
-00 1.71%
-00 0.66%
0 -20.62%
0 -19.83%
0 -14.92%
2014
NET
GROSS
Primary Benchmark (a)
00 -0.06%
-00 0.23%
00 -0.43%
-00 8.97%
-00 9.28%
-00 6.60%
00 -6.17%
00 -5.90%
00 -3.50%
0 -12.31%
0 -12.06%
00 -4.50%
0 -10.40%
00 -9.36%
00 -2.19%
2013
NET
GROSS
Primary Benchmark (a)
-00 5.02%
-00 5.32%
00 -1.62%
00 -5.74%
00 -5.47%
00 -8.08%
-0 10.10%
-0 10.41%
-00 5.77%
-00 3.82%
-00 4.11%
-00 1.83%
-0 13.14%
-0 14.45%
00 -2.60%
2012
NET
GROSS
Primary Benchmark (a)
-0 14.19%
-0 14.61%
-0 14.07%
00 -9.15%
00 -8.81%
00 -8.89%
-00 5.45%
-00 5.85%
-00 7.74%
-00 5.31%
-00 5.70%
-00 5.58%
-0 15.21%
-0 16.94%
-0 18.22%
2011
NET
GROSS
Primary Benchmark (a)
-0000000
-0000000
-0000000
-0000000
-0000000
-0000000
-0000000
-0000000
-0000000
-00 4.86%
-00 5.25%
-00 4.42%
-00 4.86%
-00 5.25%
-00 4.42%

Composite Characteristics

THROUGH December 31, 2017 | REPORTING CURRENCY: USD
Year
#Accts
Assets
(mil)
Dispersion
% of non-fee
paying assets
Total Firm
Assets (mil)
2017
-000,00 3
-000,00 5
-000,
-000,
-0 25,578
2016
-000,00 3
-000,00 4
-00 0.92
-0 86
-0 22,971
2015
-000,00 3
-000,00 3
-00 0.81
-0 89
-0 20,666
2014
-000,00 2
-000,00 3
-00 0.34
- 100
-0 20,722
2013
-000,00 2
-000,00 4
-00 1.50
- 100
-0 21,464
2012
-000,00 1
-000,00 3
-00 0.00
- 100
-0 22,171
2011
-000,00 1
-000,00 2
-00, N/A
- 100
-0 26,658
THROUGH December 31, 2017 | REPORTING CURRENCY: USD

The results for individual accounts and for different periods may vary.  Investors should not rely on prior performance results as a reliable indication of future results. Market conditions may impact performance. The performance results presented were achieved in particular market conditions which may not be repeated. Moreover, the current market volatility and uncertain regulatory environment may have a negative impact on future performance.
As of September 30, 2013, Brandes Investment Partners includes the non-SMA Division of Brandes Investment Partners L.P., Brandes Investment Partners (Europe) Limited, Brandes Investment Partners (Asia) Pte Ltd and the Brandes Investment Partners & Co. assets sub-advised by Brandes Investment Partners, L.P. The firm was redefined to reflect the expansion of the organization. As of January 1, 2006, Brandes Investment Partners was divided into two separate divisions: the SMA Division of Brandes Investment Partners, which acts as a discretionary manager to SMA or “wrap fee” program clients, including those who may invest in an SMA product; and the non-SMA Division of Brandes Investment Partners (Brandes), which acts as a discretionary manager for all other types of clients which may include pooled investment vehicles, institutional accounts and high net worth clients outside of wrap fee programs. Although the divisions may share portfolio management and other personnel, each division serves a particular target market, may trade in a different manner and may offer investment advice which differs from the other depending upon the individualized needs of the clients served. The performance data presented does not contain any SMA Division accounts.
The Brandes Emerging Markets Opportunities Equity Composite seeks long-term capital appreciation by investing primarily in equity securities of emerging country issuers, frontier country issuers, and developed-market companies with material exposure to developing markets whose equity market capitalizations exceed $5 billion at the time of purchase. The Emerging Markets Opportunities Equity portfolios may hold up to 15% of the assets in cash or cash equivalents, as the firm shall deem appropriate, pending identification of suitable investment opportunities. In addition, the composite is limited to investing no more than 40% of the composite’s assets in eligible developed market companies determined at the time of purchase. Emerging markets securities pose greater liquidity risks and other risks than securities of companies located in developed countries and traded in more established markets.
Brandes claims compliance with the Global Investment Performance Standards (GIPS®). To receive a list of composite descriptions and/or presentation that complies with GIPS standards, contact client service at 800-237-7119 or write 11988 El Camino Real, Suite 600, P.O. Box 919048, San Diego, California 92191-9048 or email ClientService@Brandes.com.
(a) The MSCI Emerging Markets Index with net dividends captures large and mid cap representation of emerging market countries. Data prior to 2001 is gross dividend and linked to the net dividend returns. MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products. The benchmark returns are not covered by the report of independent verifiers.
Brandes Investment Partners® is a registered trademark of Brandes Investment Partners, L.P. in the United States and Canada.