Canada's only gold-rated EM mutual fund

It’s from one of the smaller investment outfits in the country but boasts a strong team and sizable research effort

Andrew Willis 1 May, 2019 | 2:00PM
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Note: This article is part of Morningstar Canada's Emerging Markets Week Special Report

Andrew Willis: Managing assets in emerging markets is no easy task. You’re dealing with multiple economic uncertainties and market mechanisms to navigate. Being successful in the space means having an extensive intelligence gathering operation – and the ability to spot opportunities when others see risks.

And that’s what the investment committee for the Brandes Emerging Market Value Fund do best. In fact, they’re currently the best in Canada at investing in emerging markets according to the Morningstar Quantitative Rating, or MQR system for funds based on five quantitative pillars.

Brandes has earned a gold MQR rating overall for demonstrating strong risk-adjusted returns, quality firm stewardship, and a high value proposition. To gain insight into two other pillars used in the MQR rating, people and process, we spoke to Gerardo Zamorano, director and member of emerging markets investment committee at Brandes Investment Partners.

Zamorano and his team have seen many ups and downs in emerging market economies since the inception of the fund in 1994, but with an approach to stock selection that is entirely bottom up and uses a long term lens, they’ve found opportunities when others saw crises.

Sporting a low overlap with the MSCI emerging markets index, and flexible rules around minimum country allocations, Zamorano and his team were able to find opportunities in places such as Brazil, post-corruption scandal, where they allocated four times the benchmark to ride a recovery to profit.

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About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar Canada. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

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