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RWC aims at Next Generation Emerging Markets

1 May 2019

RWC Partners has launched a new emerging markets fund offering investors a gateway to high growth opportunities, which it says are under-represented by the current indices and funds on offer. 

The RWC Next Generation Emerging Markets Fund will be managed by an 18-strong emerging and frontier investment team headed up by RWC’s co-head of emerging and frontier markets, James Johnstone.

The fund, offered as part of the RWC Funds Luxembourg-domiciled SICAV, will focus on the less well-known countries and companies which they expect to be the big names in smaller emerging and frontier markets over the next decade.

It will hold between 50-70 positions with minimum market capitalisations of $750 million or daily dealing volumes of at least $2 million.

Johnstone said: “Smaller emerging economies and larger, more liquid frontier markets offer a compelling investment opportunity, similar to that which we saw on offer in larger emerging markets 10 to 15 years ago. These markets have low correlations to developed markets as well as each other, and so offer a truly diversified range of companies and countries as well as rapid growth prospects.”

According to Johnstone, a number of themes that are underrepresented in the MSCI Emerging Markets Index, such as financial inclusion, industrialization and urbanization, are far more prevalent in next generation emerging markets.

He added: “Using our extensive research capabilities and focus on both bottom-up and top-down analysis we are aiming to capitalise on markets currently at the earlier stages of development where such trends are taking place.”

Tord Stallvik, head of business development, RWC Partners, commented: “We are seeing a unique opportunity in smaller emerging and frontier markets to potentially replicate the exponential growth we have seen from China and other larger emerging markets over the past three decades as they capitalise on many of the same growth themes.”

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