JOHCM Emerging Markets Discovery Fund (JOMMX)

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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$8 billion and maximum weights in any one sector or country of 30%
  • Dr Ivo Kovachev

    Senior Fund Manager

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  • Emery Brewer

    Senior Fund Manager

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  • Stephen Lew

    Senior Fund Manager

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Other Emerging Markets Equity Funds

JOHCM Emerging Markets Opportunities Fund (JOEMX)

For fund managers James Syme, Paul Wimborne and Ada Chan, 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...

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Fund details

Data as at 30 June 2024
Fund size $70.21mn
Strategy size $289.76mn
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 $100,000
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 1.34% 1.72%
JOMMX Institutional 1.24% 1.62%

*Expense ratios as stated in the latest prospectus. Perpetual Americas Funds Services has contractually agreed to waive fees and reimburse expenses so that the Net Total Operating Expenses do not exceed the stated amounts until February 1, 2025.

Fund ratings

Data as at 30 June 2024
Morningstar Rating Rank
  Rank Percentile Rating
Overall Morningstar Rating™     5-Star
1 year 118/804 17% 2-Star
3 years 31/718 7% 5-Star
5 years 4/646 1% 5-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. © 2022 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 Advisor Perpetual Americas Funds Services
Transfer Agent Northern Trust
Custodian Northern Trust

Investment Background

Data as at 30 June 2024

Strategy Highlights

As at 31 March 2024

Emerging markets experienced a robust rebound in Q1, nearing a previous short-term peak. The potential for a significant breakout is noteworthy. This forecast is supported by two key observations: a) the ongoing recovery in emerging markets is occurring alongside a rebound in the US dollar, and b) a persistently-high US interest rates environment. Indeed, with inflation remaining relatively high, the state of the US interest rate environment in Q1 was consistent with our long-standing prediction of ‘higher for longer’.

Despite these developments, dismissing the strong Q1 performance as merely a reflexive rebound from a temporary low in emerging markets would be premature. The current macroeconomic indicators suggest an improving economy, potentially indicating that relatively high interest rates is part of a trend towards ‘normalisation’. This could signal the start of a recovery and growth spreading from America to the rest of the world, although it may be too early to assert this with certainty.

However, a measured approach is crucial. We’re witnessing clear signs of rotation within the market, suggesting that investors are taking profits from positions they perceive as overvalued. This unwinding of pair trades underscores the influence of profit-taking amid perceived overvaluations.

India, a standout performer in Q1, exemplifies this trend. Early gains were followed by a shift towards ‘recovery plays’ across sectors, countries (including a surprising uptick in China), and individual stocks. This investor behaviour highlights the importance of not getting swept away by euphoria and focusing on long-term outperformance. At the same time, as evidenced by India’s rapid recovery in equity performance toward the end of Q1, a measured approach to portfolio adjustments is crucial to performance optimization.

Looking beyond the recent buzz surrounding artificial intelligence (AI), a different story emerges within the broader market, sectors like industrials and real estate defied expectations, surpassing the performance of information technology in Q1. This shift suggests a more balanced market move rather than a singular focus on AI-related subsectors. 

Our own investment strategy yielded both successes and areas for improvement. Our overweight position in India proved to be a profitable decision, contributing close to half of total quarterly performance, while our stock selection in India (Sobha) and China played a significant role in our positive performance. We also saw positive performance from Asia Vital Components, due to positive developments in the company’s thermal cooling solutions for AI, and Phoenix Mills due to continuing expansion of the company’s shopping mall business in India.

However, we readily acknowledge shortcomings. Our investment in One 97 Communications in India underperformed due to a regulator crackdown on its banking operations while our investment in Global Unichip in Taiwan suffered losses due to concerns over project cancellations. Hyundai Autoever underperformed due to concerns over short- to medium-term margins caused by increased investment needs.

The current market environment presents a welcome opportunity. We perceive valuation challenges in certain areas, like India and AI tech, undergoing a healthy correction rather than a catastrophic burst. This, coupled with market rotation, creates fertile ground for our robust investment philosophy that emphasises agility and flexibility. We dynamically adjust our portfolio across sectors, countries, currencies, interest rates, and individual stocks to capitalise on shifting market dynamics.

While we remain optimistic about the future, a note of caution is prudent. While we don’t anticipate an immediate cyclical peak, the presence of bubbles cannot be entirely ignored. The coming months might see additional positive performance, but potential summer profit-taking or unforeseen political events could introduce volatility. Overall, the outlook for emerging markets is promising, but a nuanced approach that acknowledges both opportunities and risks is essential for navigating this dynamic landscape.

Total Return (%)

Data as at June 30, 2024
  1 Month Total Return 3 Month Total Return YTD Total Return 1 Year Total Return Cumulative Since Inception
Advisor Shares Net 1.85 3.98 10.05 18.02 149.86
Institutional Shares Net 1.92 3.98 10.06 18.11 151.85
Benchmark 3.20 5.93 7.04 20.04 111.62

Annualised Return (%)

Data as at June 30, 2024
  1 Year 2 Year 3 Year 4 Year 5 Year 10 Year Annualized Since Inception
Advisor Shares Net 18.02 16.88 3.15 13.86 11.84 10.08
Institutional Shares Net 18.11 16.91 3.22 13.94 11.93 10.17
Benchmark 20.04 16.61 2.54 15.27 9.99 6.62

Monthly returns (%)

Data as at 30 June 2024
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 -1.83 2.14 -2.03 -0.07 -0.45 4.04 22.11
Benchmark 2021 0.08 5.96 1.53 6.04 1.93 2.93 -1.31 1.16 -1.99 0.18 -2.94 4.21 18.75
Fund 2022 -4.53 -3.54 2.11 -6.36 0.36 -10.59 2.29 0.13 -8.61 0.74 8.88 -3.09 -21.33
Benchmark 2022 -4.42 -2.50 2.66 -5.02 -1.64 -10.53 2.76 2.48 -10.03 -0.07 9.41 -1.03 -18.02
Fund 2023 6.77 -2.83 3.70 -0.51 2.14 6.36 5.98 -2.82 -3.82 -5.08 10.71 3.03 24.71
Benchmark 2023 5.93 -2.85 0.93 0.67 1.11 4.52 6.53 -1.35 -2.05 -4.83 9.64 4.42 23.92
Fund 2024 1.70 4.14 -0.07 1.05 1.04 1.85 10.05
Benchmark 2024 -1.73 2.75 0.08 1.98 3.73 3.20 7.04

Expense Ratio (%)

Data as at March 31, 2024
Share Class Gross Expense* Net Expense*
Advisor 1.97% 1.59%
Institutional 1.87% 1.49%

Important Information

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. Perpetual Americas Funds Services has contractually agreed to waive fees and reimburse expenses so that the Net Total Operating Expenses do not exceed the stated amounts until February 1, 2025.

Top 10 holdings and active weights

Data as at 30 June 2024
Top 10 holdings
ASPEED 1.50%
Shriram Transport Finance 1.94%
PNC Infratech 1.31%
Varun Beverages 1.98%
Phoenix Mills 2.60%
VA Tech Wabag 1.60%
Sinotruk 1.16%
Asia Vital Components 2.19%
Pan American Silver 1.17%
Marcopolo 1.16%
Top 10 active weights
Phoenix Mills +2.60%
Asia Vital Components +2.19%
Northern Institutional Treasury Portfolio +2.12%
Varun Beverages +1.98%
Shriram Transport Finance +1.94%
Thermax +1.80%
Brigade Enterprises +1.61%
Exide +1.57%
VA Tech Wabag +1.55%
Kinik +1.30%

Regional / Country breakdown

Data as at 30 June 2024
Portfolio Benchmark Relative
Brazil 6.96% 3.56% 3.4%
China 5.46% 8.25% -2.79%
India 28.54% 28.68% -0.14%
Indonesia 3.07% 1.61% 1.46%
Mexico 2.97% 1.59% 1.37%
Saudi Arabia 2.69% 3.87% -1.18%
South Korea 6.20% 12.26% -6.06%
Taiwan 18.85% 22.73% -3.88%
Turkey 3.88% 2.4% 1.48%
United States 4.80% 0% 4.8%

Sector breakdown

Data as at 30 June 2024
Portfolio Benchmark Relative
Industrials 24.45% 19.06% 5.40%
Information Technology 20.74% 17.92% 2.80%
Consumer Discretionary 11.40% 11.96% -0.60%
Financials 10.73% 10.83% -0.10%
Consumer Staples 9.17% 6.14% 3.10%
Health Care 7.59% 8.29% -0.70%
Real Estate 6.76% 5.78% 1.00%
Materials 5.85% 11.33% -5.40%
Utilities 2.06% 3.31% -1.20%
Energy 1.39% 1.79% -0.40%
Communication Services 0.88% 3.54% -2.60%
Cash -1.08% 0.00% -1.08%

Market cap breakdown

Data as at 30 June 2024
Portfolio Benchmark Relative
Large 34.87% 5.14% 29.73%
Mid 46.21% 70.91% -24.70%
Small 16.42% 23.95% -7.53%

Important Information

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 17/07/2024 Institutional USD 46653M849 25.05 -0.20 -0.79% 25.25
Investor USD 46653M823 25.10 -0.20 -0.79% 25.30
JOHCM Emerging Markets Opportunities Fund 17/07/2024 Advisor USD 46653M203 11.69 -0.12 -1.02% 11.81
Institutional USD 46653M104 11.72 -0.12 -1.01% 11.84
Investor USD 46653M302 11.67 -0.12 -1.02% 11.79
JOHCM Global Select Fund 17/07/2024 Advisor USD 46653M807 14.23 -0.37 -2.53% 14.60
Institutional USD 46653M708 14.26 -0.37 -2.53% 14.63
JOHCM Emerging Markets Discovery Fund 17/07/2024 Advisor USD 46653M500 15.27 -0.06 -0.39% 15.33
Institutional USD 46653M401 15.26 -0.06 -0.39% 15.32
JOHCM International Opportunities Fund 17/07/2024 Institutional USD 46653M872 12.86 0.08 0.63% 12.78
Regnan Global Equity Impact Solutions 17/07/2024 Institutional USD 46653M716 7.62 -0.07 -0.91% 7.69
TSW Large Cap Value Fund 17/07/2024 Institutional USD 46653M641 13.65 0.13 0.96% 13.52
TSW Emerging Markets Fund 17/07/2024 Institutional USD 46653M666 9.79 -0.06 -0.61% 9.85
TSW High Yield Bond Fund 17/07/2024 Institutional USD 46653M658 9.20 -0.01 -0.11% 9.21

Important Information

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. Perpetual Americas Funds Services has contractually agreed to waive fees and reimburse expenses so that the Net Total Operating Expenses do not exceed the stated amounts until February 1, 2025.

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