This fund is better than most at navigating emerging market risks

Trimark Emerging Markets' low-turnover approach has performed well, but the price is steep.

Shehryar Khan, CFA 10 July, 2018 | 5:00PM
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Jeff Feng, lead manager of Trimark Emerging Markets, is adept at navigating the risks of this volatile asset class. His high-quality, low-turnover approach tends to do better than most in equity market sell-offs, which, despite a higher price tag, makes this fund an option worth considering for investors seeking dedicated emerging markets exposure in their portfolios.

Feng, who has 20 years of industry experience, stresses on-the-ground research, which is why he relocated to Hong Kong to be closer to the emerging Asian countries such as China, South Korea and Taiwan that make up more than 40% of the portfolio. Two Canada-based analysts, including one covering Latin America, and Invesco's other investment teams support Feng, who also works with analysts in Hong Kong.

He and the team employ a bottom-up approach to identify high-quality businesses with sustainable competitive advantages and seeks to buy them at reasonable valuations. Feng defines quality as stocks with strong organic growth, free cash flows and returns on invested capital; and capable management teams that are aligned with investors. Feng usually seeks a 30% discount to a stock's intrinsic value before buying, but he won't compromise quality for cheap valuations and will pay up for what he feels are truly exceptional businesses.

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About Author

Shehryar Khan, CFA

Shehryar Khan, CFA  Shehryar Khan, CFA, is a senior investment analyst for Morningstar’s Investment Management group.

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