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Emerging Markets Viewpoints - August

14 August 2017

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

We occasionally get asked to summarize our core investment principles.

As we have previously written, we believe that in Emerging Markets active management has a significant opportunity to outperform the index. This is because our markets are less efficient than developed markets.

In order to take advantage of this, we have to find ways of determining the inefficiencies and exploiting them for the benefit of our investors.
In summary, we invest according to three major Investment Principles:  

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Multi-Asset Blog - The 3-6-3 Rule

11 July 2017

Will Bartleet, CIO and Portfolio Manager of Pacific Multi-Asset
The 3-6-3 Rule

Bank managers used to operate on the 3-6-3 rule: borrow at 3%, lend at 6% and be on the golf course by 3pm. Ultra-low interest rates and QE has pushed down the spread between the cost of borrowing and lending which has had a detrimental effect on their net interest margins. Rising bond yields relieve this pressure, and this combined with far fewer fines, an easing of the regulatory environment and cost cutting means that earnings are growing again. 

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Emerging Markets Viewpoints - July

10 July 2017

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

Are commodity prices less relevant for our asset class? Over the past ten years the weighting of energy, oil and gas and mining has fallen by more than 50% to less than 15.0% of our index. At the same time technology, including internet stocks, has more than doubled to where it accounts to close to a quarter of our index.   

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Multi-Asset Blog - Mayday UK Election

09 July 2017

Will Bartleet, CIO and Portfolio Manager of Pacific Multi-Asset
Mayday

Politics has not lost its power to bamboozle pollsters and surprise markets. What was meant to be an opportunity to secure a strong conservative majority, now looks like a seriously rash move. Theresa May’s conservative government has been forced to attempt to form a coalition with the Democratic Unionist Party to secure a parliamentary majority. If they fail to reach an agreement, there is every possibility that the UK voters will be back at the polling stations later in the summer. 

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Emerging Markets Viewpoints - June

12 June 2017

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

The recent search for yield on the part of investors has seen a remarkable compression in spreads over the past year. Highly leveraged Chinese property companies have been amongst the chief beneficiaries of this euphoria, with a gross issuance of more than $14 billion in debt this year. 

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PAM becomes a partner in emerging markets equities manager North of South Capital

18 May 2017

Pacific Asset Management has become a partner in the boutique emerging markets equities manager, North of South Capital, founded by emerging market veteran investor Matt Linsey in 2004. Sir John Beckwith’s global diversified investment group Pacific Investments has considerable experience in emerging markets, having successfully founded Thames River Capital with its flagship emerging market fund Thames River Nevsky, which later became Nevsky Capital. 

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Multi-Asset Blog - America Last?

11 May 2017

Will Bartleet, CIO and Portfolio Manager of Pacific Multi-Asset
America Last?

US investors could be forgiven for putting America first in their asset allocation over the last seven years. US stocks gained over 130% from the end of 2009 to the end of 2016, whilst the rest of the developed world rose less than 30% and emerging markets only managed to return 6% in dollar terms.

American equities have had a lot going for them: a hugely supportive central bank, the strongest recovery of the large developed economies, high and growing margins and a vast buyer of equities – the companies themselves - issuing debt to buy back shares. These elements have all contributed to stronger earnings growth than was available elsewhere. In addition, global investors have been willing to attribute higher valuations to capture these earnings, further boosting share prices. 

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Emerging Markets Viewpoints - May

08 May 2017

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

Despite ranking number one for minority shareholder investor protection by the World Bank, the Hong Kong exchange remains something of a lottery when it comes to Mainland Chinese listed companies.

Over the past few years there have been numerous scandals ranging from minor accounting infractions to outright frauds. Companies as diverse as China Forestry, Hanergy and China Metal Recycling have been delisted as a result, leaving investors with substantial losses. 

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Multi-Asset Blog - Choppy markets after flat calm

21 April 2017

Will Bartleet, CIO and Portfolio Manager of Pacific Multi-Asset
Choppy markets after flat calm

After months of plain sailing in markets, a squall has buffeted markets over the last month. Global equities when measured in Sterling have fallen 4.5% from peak to trough. In the US, equity markets had gone 110 days without falling 1%; they typically fall that much every 11 days. That run inevitably came to an end in March. 

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Emerging Markets Viewpoints - April

10 April 2017

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

We have noticed two key trends in our asset class that while supportive of prices over the near term, could represent a significant risk in the future. 

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