Gordon Smith
Partner, Fund Research

What is it?

A funds-based service that aims to provide access to markets that are exposed to faster growing regions of the world. The service invests in strategies run by dedicated Investment Managers investing in companies whose business activities are predominantly in countries or regions classified as emerging or frontier markets.

Why Killik & Co?

As an independently-owned investment house we are free to develop investment ideas and strategies internally without any conflicts of interest. The bulk of the investments within this service are likely to be actively managed funds, curated and managed by our independent in-house analysts. Our screening and selection process goes beyond financial analytics, and includes interviews with the Fund Managers as well as ongoing contact with them, ensuring any change to the investment case can be quickly identified and addressed where necessary.

Who is it right for?

The Emerging Market Service is right for those looking for long-term growth prospects who are comfortable with higher than average levels of volatility.

The Service

The Emerging Markets Service is designed to complement and run alongside more traditional, developed market-focused direct equity portfolios. The service aims to provide access to markets that are generally exposed to faster growing regions of the world; many of the emerging economies benefit from a far more favorable population dynamics when compared to developed markets. These demographics provide a strong backdrop for consumption growth, with the penetration of many products and services well behind that of more advanced countries. These economies also often have significant potential for productivity growth through improvements to education,
the upgrading of skills and increased capital investment.

Investment in these regions can in some cases be difficult to access directly for individual investors, especially with adequate diversification via individual companies, therefore a fund-based approach is used. The service will gain exposure to investments in countries within Asia, Latin America, Emerging Europe, the Middle East and Africa.

Investment process

The team is unlimited in their scope and able to access investment strategies from around the globe, and therefore the service looks to leverage the expertise of a select number of specialist Fund Managers with experience investing in the respective markets. The service invests in a range of funds, incorporating some of the world’s leading asset managers, all of which are specially selected and monitored on a continuous basis by our dedicated Fund Research team.

The underlying geographic split within the strategy is determined by anticipated growth rates, market valuations, investor sentiment and technical analysis, with the aim of providing exposure to emerging regions where these factors provide a tailwind to long-term investment. The service then looks to leverage the expertise of a select number of specialist Fund Managers, who have experience investing in the respective markets.

The service also has the ability to invest in both regional and single country investment strategies. Stock markets with the aforementioned characteristics are likely to offer attractive long-term growth prospects, but may also exhibit higher than average levels of volatility. The strategy therefore accesses these markets via collective investment funds; investing via funds helps to provide diversification, thereby helping to reduce overall volatility. The strategy allows investment via both open-ended funds (e.g. Unit Trusts) and closed-ended funds (e.g. Investment Trusts). Investment is likely to be made in actively managed funds, however the service may also use passive index tracking funds if deemed appropriate.

Risks To Be Aware Of

As is the very nature of investing, the value of your investments will rise and fall over time. We devote our time to sourcing the very best investments to meet your objectives, however please do not assume that past performance will repeat itself and you must be comfortable in the knowledge that you may receive less than you originally invested. The majority of the underlying investments within this service will be to equity securities that are not denominated in sterling, leading to fluctuations in the portfolio value due to exchange rate movements.

Closed-ended funds may borrow to invest, thus adding to their overall level of risk, and may trade at a discount to their net asset value for prolonged periods of time.

Find Out More

Contact us on +44 (0) 20 7337 0777 or send us an email at info@killik.com to find out more about our Emerging Markets Service or alternatively fill out the form below to download the brochure.

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