The Ucits version will also be managed by Legg Mason affiliate Martin Currie’s head of global emerging markets, Kim Catechis, who has been managing the strategy since its 2015 launch via Legg Mason’s ICVC onshore offering which is available to UK investors.
The strategy’s aim is to deliver long-term capital growth by investing in sustainable companies from emerging market companies. Environmental, social, and governance (ESG) analysis has also been embedded within the bottom-up stock picking process.
Legg Mason said the most prominent theme in the portfolio was technology with one of the largest holdings in Chinese e-commerce player Alibaba. The firm has benefitted from dramatic online sales growth, greater penetration in rural China and the increase in the number of paying customers for its cloud business.
“From a governance perspective, the company has demonstrated an increasing willingness to improve disclosure which, of course, we welcome,” Catechis said.
“Emerging market companies are already dominant in many industries, and are challenging for dominance in many more. Banking, capital equipment and energy are just some of the areas that will soon be led by the developing world. The challenge for investors is to translate the developing world’s competitive advantage into real, sustainable returns.”
The portfolio aims to hold between 40 to 60 stocks, with a diversified country allocation and a high active share.
Legg Mason head of UK sales, Alexander Barry said emerging markets were very much on the agenda of their clients.
“In light of Brexit, some clients prefer the on-shore ICVC funds whilst some others would prefer a Dublin-based fund,” he said.
“Global emerging markets companies don’t necessarily behave like their developed-world counterparts and often face wildly different challenges and opportunities. To navigate this environment safely, investment managers need specialist skills, a thorough understanding of the individual companies and their risks, and perhaps most importantly, experience.”
Legg Mason said the fund was available to investors in Austria, Denmark, Finland, France, Germany, Italy, Norway, Spain, Switzerland, Sweden, and the UK.