JOHCM Emerging Markets Small Mid Cap Equity Fund (JOMEX)

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Fund Material

Data as at 31 August 2021

Fund Description

Experienced emerging equity market investors Emery Brewer, Dr Ivo Kovachev and Stephen Lew use a predominantly stock-picking approach in finding opportunities in the fast-growing developing markets. They focus on growth companies that have the potential to develop world-class products or become industry leaders in local markets.

Investment Strategy
  • The team follows a predominantly bottom-up, stock selection-driven process, complemented by a sector and country overlay, that seeks to identify the most dynamic small-cap growth stocks within their investment universe
  • The team believes share prices follow growth - by making extensive use of screening tools and closely tracking corporate news flow, the team aims to identify companies demonstrating strong revenue and earnings growth, positive earnings revisions and other signs of improvement in operational performance;
  • A flexible investment approach that identifies three types of growth stocks: classic growth e.g. smartphone manufacturers; commodities growth e.g. resources companies growing reserves or production; and recovery growth, typically sectors or countries that appear oversold;
  • Portfolio typically comprises 70-120 stocks with market caps of less than US$5 billion and maximum weights in any one sector or country of 30%
  • Emery Brewer

    Senior Fund Manager

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  • Dr Ivo Kovachev

    Senior Fund Manager

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  • Stephen Lew

    Fund Manager

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Other Emerging Markets Equity Funds

JOHCM Emerging Markets Opportunities Fund (JOEIX)

For fund managers James Syme and Paul Wimborne, identifying the most attractive emerging markets in which to invest is the most important influence on investment performance. Through an extensive process that focuses on growth, liquidity, currency, management/politics and valuations, they produce country allocation targets for each of the 20...

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Fund details

Data as at 31 August 2021
Fund size $48.01mn
Strategy size $323.36mn
Maximum capacity USD 1bn (includes the Fund and any segregated mandates for which the Senior Fund Manager is responsible)
Benchmark MSCI Emerging Markets Small Cap NR
Share classes
Advisor (Launch date) 28-January-2016
Institutional (Launch date) 17-December-2014
Minimum investment
Advisor $0
Institutional $1,000,000
Fund codes
Fund Ticker Share Class Fund Number CUSIP
JOMEX Advisor 285 46653M500
JOMMX Institutional 685 46653M401
Fees and Expenses
Fund Ticker Share Class Net Expense Ratio* Gross Expense Ratio*
JOMEX Advisor 1.59% 1.98%
JOMMX Institutional 1.49% 1.88%

*Expense ratios as stated in the latest prospectus. JOHCM (USA) Inc. has contractually agreed to waive fees and reimburse expenses so that the Net Total Operating Expenses do not exceed the stated amounts until June 30, 2022.

Fund ratings

Data as at 31 August 2021
Morningstar Rating Rank
  Rank Percentile Rating
Overall Morningstar Rating™     4-Star
1 year 59/789 9%
3 years 221/701 26% 3-Star
5 years 129/602 17% 4-Star
Morningstar Category Diversified Emerging Markets

Morningstar rankings are based on the Institutional share class and on total returns. Past performance does not guarantee future results. © 2018 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

 

Administration

Investment Adviser J O Hambro Capital Management Limited
Transfer Agent Northern Trust
Custodian Northern Trust

Strategy Highlights

As at 30 June 2021

Emerging market equities notched up solid returns in the second quarter. Strong returns in April and June sandwiched a sell-off in May as US inflation readings came in higher than expected and sparked fears over early-than-anticipated monetary policy tightening.

Within the benchmark, Brazil was the standout performer with a number of macro tailwinds helping to buoy equity markets. Its central bank raised interest rates for the third time this year in a bid to tackle inflation. Strength in the Brazilian real helped amplify gains.

Oil prices were supported by the pick-up in economic activity and helped Saudi Arabia notch up double digit returns. In China, the regulatory clampdown dampened sentiment.

The portfolio outperformed over the quarter as modestly negative sector allocation effects were more than offset by strong stock selection. Our consumer discretionary and financial holdings were the main standouts over the quarter. XTEP was the top performer by some distance. The Chinese sports shoes retailer benefited from strong sales growth in its domestic sports apparel and shoes brands. There were no material laggards within the portfolio, although not owning industrials holdings HMM and Yang Ming Marine Transport weighed on relative returns.

Over the quarter we reduced some of our recovery names – materials and industrials and moved more towards growth, in particular consumer discretionary names. We have reduced our Chinese consumer/internet platform names on the back of increased Chinese regulations and growing US discord over Chinese ADR listings. We currently have a large underweight verses the index at around 50 percent.

In terms of our outlook we expect the dollar to be strong over the near term as tapering expectations as well as potential rate hikes in the US being brought forward. China should now begin to ease as tight monetary policy has reduced loan growth slightly above nominal GDP growth and export growth wanes due to reduced bottle necks and increased demand for domestic services in the US and Europe. Longer-term, we are still negative on the dollar due to massive deficit spending in combination with stronger growth outside the US as vaccinations rates pick up in Asia and other emerging markets later in the year.

Sources for all data: JOHCM/Bloomberg (unless otherwise stated).

Total Return (%)

Data as at August 31, 2021
  1 Month Total Return 3 Month Total Return YTD Total Return 1 Year Total Return Cumulative Since Inception
Class I 2.13 2.97 20.45 37.07 128.26
Institutional 2.18 3.02 20.49 37.27 129.74
Benchmark 1.16 2.16 19.58 43.75 95.96

Annualised Return (%)

Data as at June 30, 2021
  1 Year 2 Year 3 Year 4 Year 5 Year 10 Year Annualized Since Inception
Class I 53.11 26.26 13.17 13.78 15.00 13.42
Institutional 53.24 26.40 13.26 13.89 15.09 13.52
Benchmark 63.75 22.19 12.31 10.61 11.86 8.54

Monthly returns (%)

Data as at 31 August 2021
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
Fund 2014 1.97 1.97
Benchmark 2014 3.30 3.30
Fund 2015 1.49 3.66 3.77 9.30 1.72 -2.94 -7.44 -10.36 -0.57 7.03 -0.96 -0.20 2.81
Benchmark 2015 1.44 2.26 -0.14 9.06 0.41 -4.57 -7.77 -9.65 0.00 5.91 -2.57 0.08 -6.84
Fund 2016 -5.96 -0.53 9.27 3.64 -1.79 3.84 5.15 2.47 0.74 -0.93 -5.95 -0.97 8.18
Benchmark 2016 -7.88 -0.36 10.00 1.49 -3.53 2.54 4.28 1.84 1.31 -1.48 -4.67 -0.16 2.26
Fund 2017 4.43 4.59 3.31 3.33 2.81 -0.02 6.59 3.86 -1.09 3.78 1.65 3.72 43.58
Benchmark 2017 4.68 5.20 2.63 1.13 0.69 0.78 3.57 1.95 0.04 3.51 1.76 3.70 33.82
Fund 2018 4.94 -2.62 0.98 -1.90 -1.13 -3.58 -1.89 -3.73 -4.04 -10.45 4.69 -2.64 -20.16
Benchmark 2018 5.80 -4.10 -1.27 -0.11 -2.08 -6.56 1.22 -2.11 -3.32 -10.55 5.47 -1.60 -18.59
Fund 2019 6.54 1.86 1.32 0.46 -6.53 6.40 -0.43 -2.35 1.03 4.90 -1.80 6.26 18.12
Benchmark 2019 5.38 1.30 0.94 0.21 -4.92 3.92 -1.49 -5.01 1.96 3.82 -0.59 6.11 11.50
Fund 2020 0.36 -6.66 -20.59 14.12 5.30 8.30 9.89 1.93 -2.29 -0.83 9.78 7.04 23.49
Benchmark 2020 -3.99 -7.05 -23.09 13.94 2.36 9.01 9.24 4.10 -1.64 -0.55 14.09 7.72 19.29
Fund 2021 -1.08 5.67 2.19 6.70 2.62 2.68 -1.82 2.13 20.45
Benchmark 2021 0.08 5.96 1.53 6.04 1.93 2.93 -1.31

Expense Ratio (%)

Data as at August 31, 2020
Share Class Gross Expense* Net Expense*
Advisor 1.98% 1.59%
Institutional 1.88% 1.49%
Investor 2.13% 1.74%

Disclaimer

The performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The Fund's current performance may be lower or higher than the performance data quoted. Investors may obtain performance information current to the most recent month-end, within 7 business days at www.johcm.com or by calling 866-260-9549 or 312-557-5913.

Returns shown, unless otherwise indicated, are total returns, with dividends and income reinvested. Returns for periods of less than one year are not annualized. Fee waivers are in effect; if they had not been in effect performance would have been lower.

The MSCI Emerging Markets Small Cap Index is a free float-adjusted market capitalization index that is designed to measure the performance of small capitalization equities in the emerging markets. The MSCI Emerging Markets Small Cap Index includes small cap representation across 23 Emerging Markets countries. Investing in an index is not possible.Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

Historical performance of the Emerging Markets Opportunities Fund for Class II Shares prior to its inception is based on the performance of Class I Shares, the share class most similar to Class II. The performance of Class II Shares has been adjusted to reflect differences in expenses.

*Expense ratios as stated in the latest prospectus. JOHCM (USA) Inc. has contractually agreed to waive fees and reimburse expenses so that the Net Total Operating Expenses do not exceed the stated amounts until June 30, 2022.

Top 10 holdings and active weights

Data as at 31 August 2021
Top 10 holdings
Cimc Enric 2.08%
DukSan Neolux 1.87%
Indian Energy Exchange 1.70%
Dr Lal PathLabs 1.58%
Towngas China 1.50%
Varun Beverages 1.46%
Hansol Chemical 1.40%
Shriram Transport Finance 1.28%
DGB Financial Group 1.27%
AfreecaTV Co 1.25%
Top 10 active weights
Cimc Enric +1.99%
DukSan Neolux +1.81%
Indian Energy Exchange +1.61%
Towngas China +1.43%
Dr Lal PathLabs +1.42%
Varun Beverages +1.31%
Shriram Transport Finance +1.28%
Chailease Holding +1.24%
Bank Polska Kasa Opieki +1.22%
SKC +1.21%

Regional / Country breakdown

Data as at 31 August 2021
Portfolio Benchmark Relative
Brazil 6.49% 6.49% 0%
Canada 3.32% 0% 3.32%
China 9.68% 9.18% 0.49%
Greece 2.63% 1.01% 1.61%
India 19.17% 19.17% 0%
Mexico 2.75% 1.78% 0.97%
South Africa 3.12% 3.87% -0.74%
South Korea 21.99% 17.62% 4.37%
Taiwan 15.18% 21.16% -5.98%
Thailand 2.61% 3.5% -0.88%
Cash 2.07% 0% 2.07%

Sector breakdown

Data as at 31 August 2021
Portfolio Benchmark Relative
Information Technology 20.66% 18.85% 1.80%
Industrials 17.08% 15.23% 1.90%
Consumer Discretionary 15.04% 11.51% 3.50%
Financials 12.36% 10.42% 2.00%
Materials 11.53% 12.72% -1.20%
Health Care 8.85% 9.18% -0.30%
Consumer Staples 3.49% 5.80% -2.30%
Utilities 3.43% 3.99% -0.60%
Energy 2.28% 2.02% 0.30%
Communication Services 1.85% 3.75% -1.90%
Real Estate 1.30% 6.48% -5.20%
Cash 2.07% 0.00% 2.07%

Market cap breakdown

Data as at 31 August 2021
Portfolio Benchmark Relative
Large 4.21% 2.43% 1.80%
Mid 78.96% 71.93% 7.10%
Small 14.94% 25.63% -10.70%

Disclaimer

Fund holdings, sector allocation, regional allocation and top 10 countries are subject to change without notification.

Fund

As at noon Share class Currency CUSIP Number NAV Change Change % Previous
JOHCM International Select Fund 22/09/2021 Institutional USD 46653M849 32.46 0.08 0.25% 32.38
Investor USD 46653M823 32.45 0.07 0.22% 32.38
JOHCM Emerging Markets Opportunities Fund 22/09/2021 Advisor USD 46653M203 12.80 0.09 0.71% 12.71
Institutional USD 46653M104 12.84 0.10 0.78% 12.74
Investor USD 46653M302 12.78 0.09 0.71% 12.69
JOHCM Global Select Fund 22/09/2021 Advisor USD 46653M807 22.29 0.24 1.09% 22.05
Institutional USD 46653M708 22.36 0.24 1.08% 22.12
JOHCM Emerging Markets Small-Mid Cap Equity Fund 22/09/2021 Advisor USD 46653M500 18.66 0.19 1.03% 18.47
Institutional USD 46653M401 18.69 0.19 1.03% 18.50
JOHCM Global Income Builder Fund 22/09/2021 Advisor USD 46653M799 11.22 0.07 0.63% 11.15
Institutional USD 46653M815 11.22 0.07 0.63% 11.15
Investor USD 46653M781 11.22 0.07 0.63% 11.15
JOHCM International Opportunities Fund 22/09/2021 Institutional USD 46653M872 12.16 0.04 0.33% 12.12
JOHCM Credit Income Fund 22/09/2021 Institutional USD 46653M740 10.18 0.02 0.20% 10.16
Regnan Global Equity Impact Solutions 22/09/2021 Institutional USD 46653M716 9.66 0.04 0.42% 9.62

Disclaimer

The performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The Fund's current performance may be lower or higher than the performance data quoted. Investors may obtain performance information current to the most recent month-end, within 7 business days at www.johcm.com or by calling 866-260-9549 or 312-557-5913.

Returns shown, unless otherwise indicated, are total returns, with dividends and income reinvested. Returns for periods of less than one year are not annualized. Fee waivers are in effect; if they had not been in effect performance would have been lower.

The MSCI Emerging Markets Small Cap Index is a free float-adjusted market capitalization index that is designed to measure the performance of small capitalization equities in the emerging markets. The MSCI Emerging Markets Small Cap Index includes small cap representation across 23 Emerging Markets countries. Investing in an index is not possible.Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

Historical performance of the Emerging Markets Opportunities Fund for Class II Shares prior to its inception is based on the performance of Class I Shares, the share class most similar to Class II. The performance of Class II Shares has been adjusted to reflect differences in expenses.

*Expense ratios as stated in the latest prospectus. JOHCM (USA) Inc. has contractually agreed to waive fees and reimburse expenses so that the Net Total Operating Expenses do not exceed the stated amounts until June 30, 2022.

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