Next Generation of Growth: Opportunities in Frontier and Smaller Emerging Markets
While BRIC (Brazil, Russia, India, and China) countries have dominated headlines and are still an important source of growth for the world, the next generation of opportunities for growth and stock picking are in the frontier and smaller emerging markets (FEM). We believe that FEM countries are in the early innings of a rapid transformation. However, these countries continue to be overlooked by many investors, as these capital markets tend to be smaller and in earlier stages of growth than larger emerging market (EM) counterparts.
The Next Wave of Growth for Emerging Markets
As an investment destination, the emerging markets have attracted capital over the past decades with their prospects for faster growth than in the developed markets. We believe that many of the trends propelling the emerging markets, such as spending on consumption and infrastructure, foretell their ongoing growth advantage over developed markets.
Risk and Return in the Pandemic Environment
Global equities reacted strongly as COVID-19 continued to spread around the world. Price volatilities tripled, hitting multiyear highs as the market fell by more than -20% during the first quarter of 2020. During this sell-off, health care held up better than other MSCI World sectors. COVID-19 brought both challenges and opportunities to the health care industry.
Responsible Investments in Practice
A desire for Responsible Investments (RI) has gained significant traction in recent years across the investing community, accelerated somewhat by increased adoption of the Principles for Responsible Investment supported by the United Nations. Numerous institutional investment consultants have increased their focus on evaluating RI across asset classes, whether or not a given investment strategy is explicitly focused on RI. To TimesSquare, ESG becomes another component in our holistic evaluation of a company’s return and risk mosaic.
Riding the Waves of Health Care Transformation: The Case to Invest
With help from technological advancements, the global health care industry has experienced explosive growth in the past few decades. While disruptive technologies have brought innovations and an increase in new drug applications, the volatile nature associated with high pass-or-fail risk of the sector merits a hedged approach to health care investing.
Identifying the Global Best in Breed
In the last decade, we have witnessed globalization and the growing interdependence among companies across the world. Globalization has broken down traditional competitive barriers, created integrated supply chains, and presented opportunities for small cap disruptors. A global small cap portfolio provides a unique manner to benefit from companies internationally and enables an investor to gain access to the world’s best in breed.