Chris Nicholas, Head of UK Wholesale Fund Sales at Pacific Asset Management
When it comes to Pacific Asset Management’s Emerging Markets expertise, the Partners who manage the Pacific North of South EM All Cap (value) strategy sometimes do not get equal prominence when it comes to the sales and marketing effort. However, as an owner-operated, specialty EM boutique their process relies on the close collaboration of a tightly-knit team.
Mark Latham’s (Strategist / Natural Resource Analyst & Partner) contribution to the process is critical, and his expertise lies in Commodities and Macro research, which he has accrued over 30 years. This week, the Pacific Asset Management Global Distribution Team caught up with Mark to get a sense of how important his contribution has been and we wanted to share one such example that’s quite topical.
The US-China Trade War has clearly taken a toll on global growth, but the precise extent is hard to calibrate give all the other ‘noise’ in markets.
One data measure Mark scrutinises is the Air Quality Index (AQI). In short, it is a daily report on air quality that tells you how polluted the air is. Yellow equates to ‘moderate’ and maroon indicates ‘hazardous’. The AQI chart below is a good proxy for emissions/industrial activity. This chart shows the marked improvement in Air Quality across Eastern China over just a nine month window. Mark started seeing various signs of slowing output as early as April 2019.
In May the portfolio managers Matt Linsey and Kamil Dimmich agreed to reduce some of their exposure in China, particularly within the cyclical sectors with Mark’s in-depth analysis being a key factor in the decision. It is insights like this, and Mark’s blend of ingenuity, use of technology and experience that we have all come to appreciate.
For further information on the Pacific North of South EM All Cap Equity team, their experience and strategy please follow the link below.
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