Winners rationale

It isn’t easy to stand out in a fiercely competitive category. But Goldman Sachs Asset Management managed to do that, thanks to a consistent ability to deliver returns despite volatile market conditions.GSAM follows a fundamental driven, bottom-up approach to building a high quality portfolio, considering material ESG factors into every aspect of its decision making process, where relevant.

The asset manager has two critical elements to its investment philosophy: business and valuation. It puts that to use by seeking out sound businesses that are trading at a substantial discount to intrinsic value.

A majority of GSAM’s alpha is achieved by proven stock selection decisions, drawing on the strength of the investment experience and expertise of co-portfolio managers’ Hiren Dasani and Basak Yavuz in combination with a 25-member strong Emerging Markets Equity Research team with an average investment experience of 13 years, and based in Hong Kong, Singapore, Mumbai, Sao Paulo and New York. While the magnitude of GSAM’s alpha was due to strong stock selection, the consistency was a function of the asset manager’s disciplined risk focused and portfolio construction approach.

It is no surprise that GSAM’s portfolio finds itself widely accepted on private banking platforms globally and in the region. GSAM has been managing portfolios for Institutional Investors and Private Banks in Asia for more than 25 years. Over the last 10 years, that coverage has been solidified with private banks in the region. With over US$1.9 trillion in assets under supervision globally, GSAM currently has over 30 existing private bank relationships in Asia where a distribution agreement is in place.

And investors have taken notice.

Over the trailing 12-month period as of 31 August 2020, the Goldman Sachs Emerging Markets Equity Portfolio had grown in size by about US$430 million, an increase of 188% vis-à-vis the preceding 12-month period ending August 2019.

While the period witnessed significant inflows of about US$550 million across diverse channels, the difference was driven by market appetite for the asset class as a result of volatilities caused by heightened trade tensions in 2019 and the economic impact of the COVID-19 pandemic in 2020.

One of the key differentiators GSAM offers to a select group of focus clients is access to its Strategic Advisory Solutions (SAS) resources. The SAS team provides a comprehensive suite of integrated solutions designed to help clients grow and enhance their businesses via market strategy and business practices. Add to that, the eponymous global market and economic research from Goldman Sachs, including thematic, global equity and fixed income research.

For the consistency of its performance and its resilience in a highly testing market environment, GSAM wins the Asian Private Banker’s wins Best Fund Provider – Emerging Market Equity.

Winners rationale

Benefiting from rapid industrialisation, urbanisation and the adoption of new technologies, emerging markets should make a good source of potentially long-term returns. Yet, because of their lower market efficiency and their high divergence in equity performance, only the active stock pickers who can identify emerging market winners stand to benefit. And here, Goldman Sachs Asset Management truly exhibited its strength in 2019.

As a fundamental bottom-up stock picker, the firm’s locally based research and investment team was vital to its success, thanks to its strong on-the-ground knowledge and expertise across different emerging countries and sectors.

Worth noting, Goldman Sachs Asset Management’s presence was spread across emerging markets, such as Brazil, Hong Kong, and India. This allowed it to conduct over 4,000 company meetings per year and obtain direct and timely access to corporate information.

With a strong value and fundamental bias, the team performed in-depth valuation analyses, finding companies that were trading at a substantial discount to intrinsic value.

As the firm’s flagship strategy, the emerging market equity portfolio invested in all market caps with meaningful exposure to those off-benchmark and less researched names, resulting in high active share as well as strong alpha generation. The results speak for themselves, as the strategy outperformed MSCI EM index by 4.58%, 1.89%, and 3.51% respectively over the past one, three and five years annualised, as of end August 2019.

The success of the firm was reflected too in its fund gathering capabilities. In 2019, over US$400 million was raised for this strategy, even though investor risk sentiment had been dented by the headwinds of an economic slowdown and geopolitical tensions.

The asset manager’s best-in-class investment approach and thoughtful risk management framework, along with a superior level of customised service, earned it the title of Asian Private Banker’s Best Fund Provider – Emerging Market Equity.

Winners rationale

Although emerging market corporate fundamentals remained solid and earnings growth momentum was sound throughout 2018, macroeconomic headwinds — including fears over financial turmoil in Argentina and Turkey, trade tensions, and a stronger US dollar — resulted in a challenging year and indiscriminate sell-offs in February and October, reminding investors that selectivity is key in relatively inefficient markets.

Offering the region’s wealthy some refuge from volatility, J.P. Morgan Asset Management’s Emerging Markets and Asia Pacific Equities team has developed an array of emerging market strategies, including Global Emerging Markets (GEM) Focused, GEM Opportunities, GEM Income, and GEM Small Cap.

Notably, one of its flagship EM equity products, the JPMorgan Funds – Emerging Markets Dividend Fund, outshone its peers, achieving first-quartile performance over one-month, three-month, six-month, year-to-date, and one-year periods, as of end-September 2018. The fund’s low-beta, quality-biased approach gives it less exposure to the downside and fair participation in the upside of gradually rising rates in emerging markets, resulting in consistent and relatively competitive yield.

The region’s private banking gatekeepers also highlighted J.P. Morgan Asset Management’s EM Opportunities Fund, which recorded first-quartile returns over one-month, six-month, one-year, two-year, three-year, five-year, and ten-year periods, as of 30 September 2018. The fund’s strong outperformance is due to a hybrid strategy that combines top-down asset allocation with a bottom-up fundamental approach to identify high conviction stock ideas.

J.P. Morgan Asset Management’s strong performance and, accordingly, stellar reputation in the emerging markets equities space have earned it the title of Asian Private Banker’s Best Fund Provider – Emerging Market Equity.