Omnis Global Emerging Markets Equity Opportunities Fund

Investment Objective

The fund aims to achieve a return consisting of both income and capital growth which, after all fees and expenses, exceeds the MSCI Emerging Markets TR Index over a five year rolling period.

The investment process is constructed to unearth companies, across the market cap range, where very simply risk can be reduced and potential return maximised. This involves extensive fundamental research, conducted by a large team of dedicated analysts and portfolio managers.

The process follows four key steps:

  1. Idea generation – A screening process helps filter the large universe of stocks to a more manageable number. Detailed stock specific research is then conducted by the team. The team conduct in the region of 1,200 company meetings a year across 20 different countries. Financial modelling and valuation analysis complete the stock research process.
  2. Risk Control - All prospective and existing investments are considered within Somerset’s four key stock-specific risk framework that include Business Risk, Valuation Risk, Financial Risk and Corporate Governance Risk
  3. Portfolio Construction – with focus on managing the portfolio risk at both the stock and country level. Team collaboration plays an important part feeds directly into the decision-making structure.
  4. Execution – A global emerging market portfolio is put together with exposure across geographies and market capitalisation and in line with the fund’s investment policy.

The portfolio managers are supported by the wider investment team based in London and Singapore. All of Somerset’s analysts conduct stock research and idea generation for all their strategies. Their analysts divide their coverage by region. Each analyst covers c. 15-20 names currently held in portfolios as well as monitoring a personal watch list (generally c. 10-20 names).

Somerset have continued to evolve their approach to ESG over recent years, which has included becoming a signatory of the UN Principles for Responsible Investment. Sustainability factors have always formed a part of their investment process. Governance is one of the four key pillars of the stock specific risk framework. When assessing business risk, the environmental impact of production, the treatment of human labour and product responsibility are considered, as these factors can often have a meaningful impact on business profitability and long-term investment returns.

Key Fund Facts

Depth of Resources

The fund has a strong and well-resourced investment team, which consists of 25 investment managers and analysts based in London and Singapore. Having a well-resourced team is critical when investing in emerging markets, given the eclectic mix of different countries and sectors associated with investing in the region.

Fundamental Research

The investment process relies on Somerset’s quality and depth of fundamental company research, which follows a well-structured process which has been consistently deployed over an extended period. The output is an exciting, high-conviction best ideas portfolio.

Market Capitalisation

The fund will draw on Somerset’s experience of investing across different sized companies in Emerging Markets.

Investment Policy

The fund intends to invest at least 80% in the equity securities of Emerging Markets companies defined as those which are domiciled, incorporated or have a significant exposure to Emerging Markets. The fund will adopt a flexible approach to investment, seeking to invest in companies that are undervalued relative to their economic potential. Exposure to small and medium size companies will be greater than 50% of the fund. Small and medium sized companies are defined as those with a market cap of $10 billion or less at the time of the fund’s investment. Companies whose capitalisation no longer meets this definition after investment will continue to be considered small and medium market capitalisation companies.

The fund may also invest in other transferable securities (for example, equity securities of other international companies), units in collective investment schemes (including schemes managed and operated by the ACD or its associates), money market instruments, warrants, cash, near cash and deposits as detailed in the Prospectus.

It is envisaged that the investment portfolio of the fund will be concentrated, typically comprising between 40 and 80 holdings.

Derivatives may be used for the purposes of hedging and efficient portfolio management.