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The region offers a combination of commodity rich countries which are also developing powerful domestic consumption stories. The region is characterised by two relatively large domestic economies in Mexico and Brazil and attractive valuations relative to both developed markets.    

Performance

Benchmarks
MSCI Latin America benchmark used for pooled fund. Countries in MSCI Latin America are Argentina, Brazil, Mexico, Colombia and Venezuela. Benchmark can be established in line with client requests. Cash benchmark for absolute mandates.

Philosophy
To pursue a disciplined approach applying quantitative techniques, fundamental analysis and rigorous risk management, adding value primarily through stock selection combined with country allocation. Return targets and risk parameters precisely targeted.

Objectives
To target 4.5% per annum (gross) outperformance of benchmark index with low relative volatility resulting in strong competitive performance over rolling 3 year periods
or 
Achieve an absolute return in excess of cash in-line with clients’ risk/ return targets.

Risk Control
Total tracking error range for pooled funds:
Overall portfolio: 2%-12%
Stocks:               4%-14%

Target average tracking error:
Overall portfolio:   9%
Stocks:               12%

Risk parameters are established by first deciding the return objective (4.5%) and then assuming an information ratio of 0.5 to provide a target overall tracking error of 9%. Risk is disaggregated down to the stock level. Weekly performance attribution is conducted.

Investment Team

 Key Strengths

• Experienced Team - Highly experienced (average 13 years) and fully resourced team. The bulk of the global team has been together for over 5 years using the same investment process.
• Team Approach - A unique team structure ensures an improved quality of investment decision and minimal divergent performance between similar client accounts. Clients receive input from all members of the team not just individual Fund Managers.
• Investment Approach - Target country selection 20% of value added, stock selection 80% for Latin America Equity Funds.
• Stock Selection - Proven stock selection process based on fundamental analysis leading to analysts ranking.
• Integrated Bond & Equity Teams - Combined resource adds value to the country allocation decision
• Rigorous Risk Control - A risk budget is set for both country asset allocation and stock selection. The latter is alpha adjusted to ensure risk reflects value added.
  

Fees
Standard fee: 1.0%. Fees are negotiable depending on the size and nature of the mandate.

Minimum Size for segregated fund
US$ 25m

Emerging Markets under Management
US$ 2.9bn (September 2008) assets either managed directly or on an advisory basis