Comment from Tom Delic, fund manager, Seneca Investment Managers:
“We recently added the HMG Global Emerging Markets Equity Fund to our Diversified Growth portfolio. The fund is run by a Paris based team, led by Marc and Paul Girault and we were attracted by their distinctive approach. The fund focuses on a proprietary universe of emerging market listed subsidiaries of multinational developed market businesses. The oversight of a parent company within the emerging markets offers commercial advantages such as brand and extensive industry experience.
“Subsidiaries are often set up to sell goods and services in the country where they are listed, providing us with genuine exposure to domestic growth within emerging markets, including South America, Eastern Europe and the Pacific Rim.
“The portfolio construction of the fund is completely index agnostic, with small to mid-caps making up over 76% of the fund*, and allocations to frontier markets such as Africa. The result is a highly active portfolio which is very different to traditional emerging market indices. The team employs a value philosophy, buying subsidiaries when they are trading at substantial discounts to intrinsic value and are out of favour with other investors, mirroring our own multi-asset value investing approach.
“Since the launch of the UCITS version of the fund in 2014, performance has lagged the broader emerging market index**. The index has been driven by the performance of the Chinese technology sector, where this fund has no exposure. We however see strong long-term potential for the fund, and believe that investing in a manager when their style is out of fashion can be a great opportunity.
“We have a 4.5% position in Emerging Markets within the Seneca Diversified Growth Fund.”
* Source: fund factsheet February 2018
**As at 23/03/18
Alastair Doyle, Four Broadgate
Tel: +44 (0) 20 3697 4200
About Seneca Investment Managers
Seneca Investment Managers, based in Liverpool with a national client base, operate a multi-ass
et value approach to investing. Investors range from institutions such as pension funds and charities, through to financial advisers, discretionary private client managers and personal investors.
Seneca Investment Managers has a heritage stretching back to 2002 and prides itself on the ability to identify and invest where there is both quality and unrealised value.
Past performance should not be seen as an indication of future performance. The value of investments and any income may fluctuate and investors may not get back the full amount invested.
The views expressed are those of the fund manager at the time of writing and are subject to change without notice. They are not necessarily the views of Seneca and do not constitute investment advice or a recommendation to invest in this particular fund. Whilst Seneca has used all reasonable efforts to ensure the accuracy of the information contained in this communication, we cannot guarantee the reliability, completeness or accuracy of the content.
This communication provides information for professional use only and should not be relied upon by retail investors as the sole basis for investment.
Before investing in the LF Seneca Diversified Growth Fund you must read the key investor information document (KIID) as it contains important information regarding the fund, including charges, tax and fund specific risk warnings and will form the basis of any investment. The prospectus, KIID and application forms are available in English from Link Fund Solutions, the Authorised Corporate Director of the Fund (0345 608 1497).
Seneca Investment Managers Limited (0151 906 2450) is authorised and regulated by the Financial Conduct Authority and is registered in England No. 4325961 with its registered office at 10th Floor, Horton House, Exchange Flags, Liverpool, L2 3YL. FP18/103