We believe investing with a value oriented investment philosophy will deliver superior returns for investors over the long term at a lower level of risk. In addition, we believe that emerging and frontier market assets are often inefficiently priced as a result of the diversity of these asset classes and the tendency for individual markets to experience periodic bouts of volatility.
Closed end funds represent an area of specific expertise within the investment team. We believe discounts on closed end funds offer an additional source of alpha for long term investors.
When selecting “best of breed” managers, it is our belief that locally based stock pickers with expertise in specific markets have an informational advantage over global investors that can be converted into managerial alpha over the long term. In our experience, boutique asset management groups offer the benefits of greater transparency and accessibility as well as the ability to invest with greater conviction in their best ideas. We favour managers that invest substantial portions of their net worth in their own products as we feel that this gives the closest alignment of interest possible with shareholders. We actively seek to avoid managers whose portfolios closely resemble underlying indices.
Given our positive long term view on both emerging and frontier markets we invest on a long only basis with a long term investment horizon and without the use of gearing or derivatives. We believe the best risk controls are common sense and diversification.