A key reason for this outperformance is the disciplined investment process
the managers use. This involves finding well-managed, high-quality
businesses that have sustainable competitive advantages, and that are
trading at a discount to what they believe it to be worth. A typical
company in the portfolio will generate significant free cash flow, have
strong organic growth rates, and high returns on capital.
Building the portfolio is very much a bottom-up endeavor, and the team is
consciously benchmark agnostic. Country allocation and sector mix is
largely the byproduct of the security selection process. However, the
process tends to favour more growth-focused sectors, such as technology,
consumer names, and healthcare.
At the end of June, consumer staples represented 28% of the fund, consumer
discretionary 22%, information technology 17%, and financials 16%.
Geographically, at the end of June, the fund was heavily weighted to Asian
holdings, with 30.4% of the portfolio in Chinese stocks and 11.4% in South
Top holdings as of June 30 included South Korea-based information
technology (IT) giant Samsung Electronics Co. preferreds,
Ltd., Chinese consumer staples firm Kweichow Moutai Co.,
UK-based consumer discretionary company Liberty LiLAC Group, Chinese IT firm Alibaba Group Holding Ltd., Brazilian IT firm Cielo S.A.
Volatility for the fund is slightly above the market, with an average
3-year standard deviation of 13.4% to the end of June, and it has
outperformed in both rising and falling markets. The managers are patient,
long-term investors, with portfolio turnover averaging between 20% and 30%
While recent performance may have been excellent, the portfolio looks
nothing like its benchmark, meaning that it is likely there will be a
dislocation in performance between this fund and the benchmark. This can be
a positive, as it has been in recent years, but could also be a headwind.
Still, for those looking for a well-managed, active, concentrated portfolio
of quality emerging markets companies, this is fund is worth your
Trimark Emerging Markets Class, Series A
Emerging Markets Equity
FundGrade A+ Award:
Large Cap Blend
Jeff Feng since April 2013; Matt Peden since April 2013
AIM2143 (front end load)
Dave Paterson, CFA, is the Director of Research, Investment Funds for
D.A. Paterson & Associates Inc., a consulting firm specializing in providing research and due
diligence on a variety of investment products. He is also the publisher
Dave Paterson’s Top Funds Report,
offering regular commentary and in-depth analysis of Canada’s top
investment funds. He uses a unique analytical approach to identify
funds with strong, risk-adjusted returns, and regularly publishes his
insights and analyses in Fund Library.
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amount of your investment in the fund will be returned to you. Fund values
change frequently and past performance may not be repeated. No guarantee of
performance is made or implied. This article is for information purposes
only and is not intended as personalized investment advice.