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Emerging Markets Webcast with North of South Capital
The Danger of the Monetary Illusion

Kamil Dimmich, Co-manager and Partner of North of South Capital was recently asked by Brooks MacDonald to participate in their latest webcast.

Kamil discusses the Monetary Illusion, a term made famous by John Maynard Keynes which describes the tendency of investors to fixate on higher nominal returns rather than focus on real returns. He explains why this is particularly true in some emerging markets and how it is possible to ensure you don’t fall foul of this common investor trap. 

Latest Emerging Market Viewpoints
From Matt Linsey and the North of South Capital team

Even before the current Mexican President Manuel Lopez Obrador (AMLO) had taken office, he and his party (Morena) caused a significant sell off in both the equity and currency markets. 

Latest Emerging Market Viewpoints
From Matt Linsey and the North of South Capital team

The last two occasions when the Chinese authorities decided to stimulate their economy, the result was a substantial increase in the prices for most commodities. This was particularly the case in 2009 in wake of the global financial crisis. Although the stimulus in 2015-16 was quite a bit smaller, it also had a very favourable impact on the price of commodities. 

Latest Emerging Market Viewpoints
From Matt Linsey and the North of South Capital team

Are Emerging Market equities becoming less risky in relation to developed markets? If one were to look purely at debt to GDP ratios, savings ratios, political stability and the level of domestic interest rates a fairly strong case could be made that our asset class looks as good, or better in a number of cases, than the U.S., Japan and Europe. 

November Webcast Replay
With the PAM Investment Management Teams

With the current market environment causing uncertainty and testing investors’ nerves, Pacific Asset Management invited clients to listen and take part in the Pacific Weekly Investment Meeting. Matthew Lamb (CEO), was joined by Will Bartleet CIO / Portfolio Manager of Pacific’s range of multi-asset solutions and by our Emerging Markets and G10 Macro rates fund teams. 

Latest Emerging Market Viewpoints
From Matt Linsey and the North of South Capital team

As 2018 draws to a close it is easy to forget that Emerging Markets were outperforming their developed counterparts only last year. This has now largely been reversed and brings us back to where we were in 2016 in relative terms. The MSCI Emerging market index remains at least 30% cheaper than the S&P on most measures. 

Latest Emerging Market Viewpoints
From Matt Linsey and the North of South Capital team

Taiwan remains one of our favourite markets. It enjoys the lowest cost of capital in the emerging market universe and has a large number of companies with net cash on the balance sheet. Many of these stocks pay dividend yields in excess of 5.0% and are often majority controlled by their management. 

Latest Emerging Market Viewpoints
From Matt Linsey and the North of South Capital team

Anyone who is familiar with our investment process will know that at North of South we like to stress the importance of the cost of capital. A flexible methodology, which can accommodate the wide spectrum of sovereign macro conditions our corporates are exposed to, is critical to levelling the playing field for a dollar-based investor. 

Latest Emerging Market Viewpoints
From Matt Linsey and the North of South Capital team

China currently accounts for over 30% of the benchmark market capitalisation of the MSCI Global Emerging Market index. At this level China now represents a higher percentage of the index than any individual country has in the past. 

Latest Emerging Market Viewpoints
From Matt Linsey and the North of South Capital team

Investors we meet are often preoccupied with their exposure to style factors. The largest dichotomy seems to exist between the growth and value investment style. We at North of South Capital subscribe to the view that value investing works over time and allows an active manager to outperform the market. Our investment process is built around this premise.