September, 2023
Continuing geopolitical tensions, concerns about the Chinese economy and a resilient US economy were the key factors at play in emerging market equities that saw modest gains in the third quarter of 2023 in Australian dollar terms. Despite the recent focus on China, and particularly its indebted property sector, Asia still stayed positive, finishing 0.1% higher. Countries in Latin America registered losses of just under 2% while stocks in Eastern Europe saw declines of over 5%. Commodity prices were generally strong with crude oil prices rising on higher demand and supply cuts.
Chinese stocks suffered particularly in the early part of the quarter, and especially after large property developer Country Garden unexpectedly missed a debt payment. Although authorities acted quickly by cutting the reserve requirement and lowering the deposit ratio, the market was still rattled by the event and the outlook for the economy. South Korean and Taiwanese stocks that had previously performed well, especially in the technology sector, also suffered. Malaysian share prices were buoyed by higher crude oil prices. Indian equities rallied on optimism about the economy.
Except for Colombia where crude oil prices were again supportive. Latin American markets finished lower in the quarter. Concerns over Chinese demand for raw materials as well as political uncertainty played a role. After posting very strong returns, aided by its close trading relationship with the United States, Mexican equities saw profit-taking.
Across European emerging markets, there was substantial profit-taking following a very strong period in markets such as Poland and Greece. Hungarian equity prices ended a volatile quarter with positive returns, although investors were still nervous about another possible tax on banks. Egyptian share prices rose after a brutal year which included the end of an agricultural deal with Ukraine. Turkish stocks rallied on interest rate hikes and a greater likelihood of more orthodox monetary policy. United Arab Emirates property demand helped generate strong returns domestically.
In the third quarter, the Fund gained in absolute terms and outperformed its benchmark, the MSCI Emerging Markets Index. (Excess return is measured net of fees and in Australian dollar terms.)
Contributors to performance:
▪ Shares of oil producers Petroleo Brasileiro (Petrobras), based in Brazil, and Galp Energia, based in Portugal with assets in Latin America and Africa, both gained in sympathy with the surge in oil prices.
▪ Shares of electronics manufacturer Quanta Computer gained, as technology hardware and infrastructure stocks re-rated due to the frenzy over the potential for artificial intelligence related demand
▪ Shares of Indus Towers traded higher on hopes that the India-based telecom infrastructure company’s major customer, Voda Idea, was better positioned to satisfy some overdue payments.
Detractors from performance:
▪ Shares of contract Taiwan-based chipmaker Taiwan Semiconductor Manufacturing Company retreated on worries about softening global consumer demand for electronics.
▪ Shares of Hengan International traded lower after the China-based hygiene products maker reported that first half 2023 profits declined from a year earlier.
▪ Shares of Brazil-based toll road CCR fell on profit taking after strong recent stock price appreciation. We continue to believe that the global economy is currently in the process of bottoming out, marked by a divergence in growth among countries. We are anticipating higher growth in developing countries over the next several years, and because of this, we believe that emerging markets remain one of the most mispriced asset classes globally
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2023-04-5.pdfAugust, 2023
Intensifying investor concerns over the Chinese economy and somewhat greater confidence over the US economy caused emerging market equities to underperform shares in developed countries in August. The focus in China was primarily on the real estate industry which pressured global equity markets overall. Emerging markets witnessed broad-based price weakness with only three countries recording positive returns in Australian dollar terms.
The MSCI Emerging Markets Index fell by 2.4% over the month with stock prices falling by about the same amount in Asia and 3.5% in Latin America. Share prices in Europe, the Middle East and Africa (EMEA) benefitted from positive returns in Turkey, Hungary, and Egypt although overall, the geographic group still finished about 1.5% lower.
Early in the month, a large Chinese property developer, Country Garden, failed to make a debt payment which appeared to be manageable. This caused confusion and concern among investors who speculated that the industry problems were far deeper than the market had believed. Despite government actions, such as reducing interest rates and lowering deposit ratios on property purchases, worries persisted especially over whether deteriorating confidence would severely affect consumer spending. South Korean shares were negatively affected by the concerns over Chinese economic growth and fell significantly. In India, strong second quarter GDP growth kept share prices in positive territory even amid the negative performance seen in the financial sector. For the most part, weakness elsewhere in Asia was relatively muted.
Across Latin America, markets were also adversely affected by Chinese concerns. All commodity-rich countries witnessed larger-than-index declines. Mexico, a recent beneficiary of its close trading relationship with the US as well as the nearshoring trend, still fell by 0.6%. After a strong recent performance, share price weakness was recorded in Polish, and Czech equity markets. Strong results by financial company OTP helped boost Hungarian equities. South African stocks were hurt by commodity price declines, load sharing and inflation trends, all of which undermined the rand. In Turkey, more orthodox monetary policies, including an interest rate rise from central bank, helped the lira, and share prices. By sector, energy outperformed while consumer discretionary and communications services were the largest decliners.
Contributors to performance:
▪ OTP Bank shares rallied as the outlook for the Hungarian bank improved due to a pickup in asset quality and the expansion of margins.
▪ Shares of GALP, a Portuguese based energy company with assets in Brazil and Africa, rose on the back of rising energy prices with production cuts by the Organization of the Petroleum Exporting Countries (OPEC) successfully drawing down inventories.
▪ Shares of KT Corp, a Korean telecom services company, gained on expectations that a new chief executive officer (CEO) would be appointed.
The stock also got a boost from good cost management in the second quarter.
Detractors from performance:
▪ Chinese insurance company Ping An Insurance saw its shares weaken amid concerns about its exposure to the property sector.
▪ Shares of Chinese banks China Merchants Bank and China Construction Bank fell due to mounting net interest margin pressure from lower rates and fears that more borrowers could refinance their mortgages, squeezing the companies’ profits.
▪ Shares of Nedbank, a South African bank, declined due to slowing GDP growth in the country and asset quality deterioration in the consumer loan book due to higher prime rates.
July, 2023
Share prices across almost all emerging markets rebounded in July after ending the second quarter in a somber mood. The MSCI Emerging Markets Index recovered by 4.9% in Australian dollar terms, breaking a five-month trend of underperformance relative to developed markets. Positive returns were seen across all regions, with Eastern Europe and Asia both rising more than 4% while Latin American stocks rallied over 3%. Highlights during the month included public statements by senior Chinese leaders confirming the importance of foreign investors and supporting the real estate sector. The period also witnessed general commodity price strength and modest currency weakness versus the US dollar.
In Europe, the Middle East and Africa, Turkish and South African equities were particularly strong. Despite further currency weakness, a 250- basis point interest rate increase implemented by the Turkish central bank coupled with the announcement of more orthodox monetary policy and plans for continued credit tightening prompted investor buying. South African equities performed well on optimism over increasing Chinese demand and improving trends in energy management. Egyptian shares fell by 2.9% as Russia ended an agricultural deal with Ukraine, a measure likely to further strain Egyptian food subsidies.
In Asia, Chinese equities rebounded more than 9% as investor optimism returned to the internet platform industry after more positive government statements regarding large fintech companies and the real estate sector. In general, interest in Asian shares increased after considerable pessimism in the second quarter. Rebounds were recorded in equities in Malaysia and Thailand, while South Korea sustained gains after periods of underperformance. Returns in India, while still positive, were mundane as technology share prices were more restrained. Taiwan stocks fell slightly.
All Latin American markets witnessed gains during the month. Strong crude oil and commodity prices helped most markets particularly in Colombia and Peru, where double digit returns were recorded. Brazilian, Chilean, and Mexican stock prices rallied on positive sentiment over potential increases in Chinese demand.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2023-04-3.pdfJune, 2023
Ongoing concerns over global economic growth restrained financial returns in the developing world during the second quarter of 2023. Regions that saw easing inflationary pressures, particularly in Eastern Europe and Latin America, recovered strongly, posting net returns of 20.3% and 14.8% respectively. Asian markets proved to be somewhat disappointing, falling by 0.2% in the period.
Chinese equities fell by 9.2% as shares of some of the internet platform companies saw continued sell off. Thai and Malaysian stocks suffered a similar setback, hurt by concerns over currency. South Korean and Taiwanese shares fared better, aided by interest in new alternative intelligence (AI) applications which resulted in positive performance by information technology stocks. The best performance in the region was seen in India where investors remain optimistic about the economic outlook.
All Latin American markets finished the quarter higher and many, by a considerable measure, helped by lower inflation trends and the potential for declining interest rates. Strong energy stock performance helped equities in Brazil and Colombia, while Peruvian shares recovered mostly due to decent earnings results. Mexican stocks rallied on general investor optimism over currency and economic stability.
Eastern European shares enjoyed a robust rebound in the quarter as investors witnessed easing inflationary pressures that fueled optimism for a regional economic recovery. The clearest sign was observed in Poland and Hungary, the markets which had been adversely affected by the Russian invasion of Ukraine. Greek stock prices also rose markedly, following a general election that saw incumbent Kyriakos Mitsotakis win a minority victory. In neighboring Turkey, President Recep Tayyip Erdogan was also re-elected and successfully reappointed respected former Economy Minister Mehmet Simsek to his cabinet. While this was generally viewed as positive by investors, it may require an economic adjustment, a concern that sent markets to a meaningful retreat.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2023-04-2.pdfMay, 2023
Emerging markets equities rose modestly in May in Australian dollar terms amid mixed economic signals. Asia, and Latin America, both finished more than one percent higher. Stocks fared worst in Europe, the Middle East and Africa (EMEA), dropping by about 4%. Commodity prices fell significantly in May, adding downward pressure on producers.
Technology company shares in South Korea and Taiwan rallied in May, fueling gains in Asia, amid new excitement over artificial intelligence and ChatGPT trends. That helped counter the weakness seen in other parts of the region which stemmed from concerns over China’s slower-than-expected economic recovery. Chinese internet platform stocks also fell on mixed revenue and profit trends, while Malaysian equities slumped on weaker crude oil prices.
In Latin America, Argentina and Brazil outperformed, while Colombian equities were weighed down by lower commodity prices, especially crude oil. Peruvian shares also fell.
Eastern European, Middle East and African markets were impacted by several factors in May. South African shares were hit by ongoing political tensions, commodity price pressures and power outages, all of which hurt the rand. In Turkey, President Recep Tayyip Erdogan surprised commentators by eking out a close-fought victory in the elections. In Greece, stocks got a boost from Prime Minister Kyriakos Mitsotakis’s stronger-than-expected election victory, albeit resulting in a minority government.
Contributors to Performance:
▪ Shares of South Korean semiconductor manufacturer SK Hynix and Samsung Electronics, a manufacturer of electronic consumer products and semiconductors, both rose on expectations that the memory industry is bottoming, and that the proliferation of artificial intelligence (AI) servers could help the transition to double data rate 5 memory chip known as DDR5 and help clear inventories.
▪ Quanta Computer, a Taiwanese manufacturer of notebook computers, is also expected to benefit from AI datacenter investments and the company recently outlined its growing auto electronics business.
▪ MediaTek, a Taiwanese fabless semiconductor company, recently launched a new Dimensity product for the auto market and formed a partnership with NVIDIA to help penetrate the auto market.
Detractors from Performance:
▪ Shares of BB Seguridade, a Brazilian insurance company, saw profit-taking after a period of strength.
▪ Shares of Galp Energia, a Portuguese energy company with exposure to Brazil and Africa, declined along with the slump in crude oil prices.
▪ Ping An Insurance, a Chinese insurance company, also experienced prof-taking after a brief rally in the share price.
April, 2023
Ongoing concerns over geopolitics and US banking health resulted in unexciting returns across global equity markets in April. In emerging markets, negative market sentiment was renewed over possible further US sanctions on China and the outlook for Chinese internet platform stocks. The MSCI Emerging Markets index closed the month little changed in Australian dollar terms, weighed down by declines in parts of Asia. Stocks in Eastern Europe, the Middle East and Africa (EMEA) and Latin America rose by 5.4% and 4.1% respectively, offsetting losses elsewhere.
The underperformance in Asia was also driven by the share price weakness of technology stocks in Taiwan and internet platform equities in China. Most of the other Asian markets saw stock prices rise. This was most true in Indonesia and India, where equity prices finished 8% and 5.6% higher respectively, helped by currency stability and optimism about the nations’ economic direction.
Most Latin American markets witnessed stronger equity prices over the month. Chilean share prices closed little changed on the difficult political situation. In Colombia, the market finished higher even as political tensions rose and the country’s president, Gustavo Petro, appeared frustrated by the process.
Decent earnings results coupled with stronger currency movements helped equity prices in Poland, Hungary, and Greece. In Turkey, not even the possibility of a market-friendly presidential election result was enough to keep domestic share prices from declining almost 4%, as the lira weakened, and concerns mounted over earnings results. In Saudi Arabia and the United Arab Emirates, equities rallied on improving crude oil prices.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2023-04.pdfMarch, 2023
Emerging markets equities enjoyed another period of price strength in the first quarter of 2023 as the reopening of China increased the likelihood of a more stable global economy. The MSCI Emerging Markets Index rose by 5.3% in Australian dollar terms with fairly similar and balanced performances in Asia and Latin America.
In China, an announcement by internet giant Alibaba to split itself into five businesses helped strengthen market performance. Stock prices in Indonesia recorded sharp rises as investors became more optimistic on the trajectory of the economy. Equities in Taiwan and South Korea benefited from expectations of improving hardware and semiconductor orders. Indian share prices were negatively impacted by concerns over valuations in the market and issues related to the highly indebted Adani group companies.
Europe, the Middle East, and Africa witnessed diverse performance. The Czech market rose very sharply on strong earnings results from utility CEZ. Greek shares rallied on good macroeconomic indicators. Hungarian stock prices finished modestly higher while the Polish market closed little changed. Turkey witnessed a very large and tragic earthquake which ultimately helped cause significant share price declines.
Markets in both Saudi Arabia and South Africa finished little changed. Political uncertainty fueled by the continued public disagreement between President Luiz Inácio Lula da Silva and central bank president Roberto Campos Neto helped depress equity prices in Brazil. Weak oil prices sent Colombian share prices sharply lower. The Peruvian and Chilean markets were aided by higher copper prices. Mexican stocks recorded very strong performance on higher economic indicators.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2023-03.pdfFebruary, 2023
Following a very strong January, emerging markets equities experienced significant profit-taking in February. The MSCI Emerging Markets Index fell by more than 2% over the month in Australian dollar terms, with fairly similar performance in both Asian and Latin American markets and modestly better returns in Europe and the Middle East. The month included generally weaker commodity prices and currencies versus the US dollar.
Share prices in Saudi Arabia fell by more than 3% on further profit-taking following considerable strength last year. Concerns over lower commodities prices pressured South African stock prices. Most Eastern European countries enjoyed positive performance on an improving economic outlook, helped to some extent by relatively warm weather. Turkish equity prices rose solidly despite experiencing a tragic and widespread earthquake.
Latin American markets were dragged down by Brazil and Colombia where share prices were hurt by political uncertainty and marginally weaker crude oil prices. Elsewhere, Chile and Peru saw somewhat less turbulence despite ongoing political strife. Mexican equities held up best, finishing higher, aided by a stable peso that was supported by nearshoring trends.
Sizable share price losses were recorded across Asia. Ongoing geopolitical and regulatory issues caused further weakness in Chinese stock prices and helped pressure currencies and equity prices in South Korea and Thailand. Indian shares acted fairly independently, finishing little changed amid investor wariness over valuations and the recent Adani group events and news. Equities in Indonesia and Taiwan fared better due to signs of economic growth in the former and improved hardware industry stability in the latter.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2023-02.pdfJanuary, 2023
Encouraging economic trends, with falling global inflation and the ongoing reopening of the Chinese economy, helped markets across the developing world generate strong returns in January. The MSCI Emerging Markets Index rose by 3.84% in Australian dollar terms with all regions registering similar results. Markets rose by 4.12% in Eastern Europe, 4.54% in Asia, and 5.74% in Latin America. Shares in the Gulf region were less buoyant on more reasonable expectations for crude oil prices.
The reopening of the Chinese economy continued rapidly after its initiation in December. COVID infections appeared to rise quickly in the major urban centers, but citizens made considerable use of restaurants, public transportation, and the outdoors as Chinese New Year celebrations began. This helped Chinese equities rise by almost 7.6% over the month and aided other regional markets such as Taiwan and South Korea, where trade in technology and other goods is expected to increase. Southeast Asian markets were also viewed as beneficiaries but climbed less. Indian shares were subjected to profit taking as investors scrutinized debt burdened Adani group companies.
Lower crude oil prices and signs of a stalemate in Ukraine helped Eastern European markets rally. Czech stocks experienced a particularly good month, rising by 12.72%. Turkish shares witnessed significant profit-taking after having enjoyed the best country return in the asset class in 2022 and as it approaches the presidential election. South African and Gulf states’ equity markets finished higher but rose less than most of their neighbors due to a weak rand and less strength from crude oil and other commodity prices.
Latin American shares recorded very strong returns in January. Mexican stock prices rose sharply after having lagged regional rivals. Strong copper prices helped equities in Chile and Peru, despite considerable political unrest in the latter. Returns in Colombia and Brazil were more muted as crude oil prices weakened and President Lula da Silva’s government began implementing policies.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2023-01.pdfDecember, 2022
Aided by declining investor pessimism in Europe and a significant rally in China on the reopening of its economy, emerging markets rebounded strongly in the fourth quarter of 2022. The MSCI Emerging Markets Index rose by 4% in Australian dollar terms over the quarter with a return of almost 38% generated in European emerging markets. The prospect of a reopening in China helped Asian equities rise just over 5% while Latin American shares rose by 0.25%.
Major gains were registered across most Asian markets as geopolitical concerns moderated in the months following the meeting of the National Congress of the Chinese Communist Party. However, later in the quarter, after some demonstrations over the zero-COVID policy, China started to materially reduce COVID restrictions. Measures were also established to relieve financing risks in the property market. These factors also helped stock prices in neighboring markets, especially those in places like South Korea, which exports heavily to China. Equities in Thailand finished stronger, as investors anticipated a major recovery in Chinese tourism. Other regional markets, such as India and Indonesia, saw muted or even negative returns after strong gains.
Latin American markets were also stronger over the quarter. The robust US dollar helped Mexican share prices. Despite political turmoil in Peru, which involved the impeachment of President Pedro Castillo following his attempt to dissolve Congress and form a provisional government, share prices rose substantially over the quarter. More muted returns were registered in Brazil following a close presidential election as former President Luiz Inácio Lula da Silva was re-elected and investors became increasingly worried about its administration and spending ambitions.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2022-12.pdfNovember, 2022
Developing countries witnessed a sharp market recovery in November, led by north Asian markets, particularly Chinese equities, including many technology and internet platform company shares. The MSCI Emerging Markets Index rose by 9.6% in Australian dollar terms with stocks in Asia rising by over 13%. Latin American shares ended the month down 4% while those in Eastern Europe, the Middle East, and African region were down 0.08%.
Energy producing countries suffered over the month with share prices in Saudi Arabia, the United Arab Emirates, and Qatar declining as crude oil prices fell. Eastern European shares rose significantly over the month as the Ukrainian conflict looked more manageable. Egyptian share prices bounced sharply as Ukrainian grain shipments resumed and a major environmental conference occurred in the country. South African equities performed well on optimism over economic recovery and strong metals prices.
In Latin America, Brazilian equities finished the month down close to 7% on nervousness over the election of President Luis Ignacio Lula de Silva and concerns over budgetary pressures. All other regional markets finished higher with Chilean investors re-evaluating the new pensions draft.
Across Asia, some markets which have recently been strong, like Indonesia, generated lower returns in November. Countries where stock prices have been under pressure, such as in South Korea, Taiwan, and China, enjoyed strong returns ranging from just under 10% to nearly 24%. The Chinese market benefited from a recovery in internet platform company shares as well as other areas due to measures enacted to relieve financing risks in the property sector and, despite some public disturbances, fewer Covid-19 lockdowns.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2022-11.pdfOctober, 2022
Share prices in emerging markets continued to be weaker in October, mainly due to Asian markets. The MSCI EM Index fell by 2.57% in Australian dollar terms, considerably underperforming developed country markets, with Asian markets dropping by 5.34%. Latin American equities continued to be resilient, climbing by 10.3% and stock prices in Europe, the Middle East, and Africa rebounded by close to 5%.
Asian shares fell significantly in the month. In particular, the National Congress of the Chinese Communist Party appeared to reinforce general opinions that Xi Jinping was accumulating considerably more power and that nationalism and technological development was being prioritized over economic management. This caused further weakness as investors believed the economy was likely to remain under pressure and Chinese share prices fell by 16.35%. The Taiwanese market also fell markedly as worries about a conflict with China remained high. Elsewhere across Asia, markets generally finished modestly stronger.
Latin American markets all performed well in October, capping off a strong multi-month recovery period. Brazilian equity prices rallied by 9.2% as a remarkably close presidential election finished in favor of socialist former President Luis Ignacio Lula da Silva. Sizeable rebounds were witnessed in Mexican and Peruvian share prices on the strong US dollar and steady commodity prices. After recent weak performance, Eastern European equities experienced a much stronger period in October.
Polish and Hungarian stocks rallied on a slightly improved economic scenario. Turkish stocks continued to benefit, despite high inflation, from regional reallocations. Small positive returns were registered in most markets in the Middle East and in South Africa.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2022-10.pdfSeptember, 2022
Intensifying inflationary pressures, which caused another round of central bank interest rate hikes, the ongoing Russo-Ukrainian conflict, and hardening opinions toward recessionary conditions in the global economy, all helped to depress emerging markets further in the third quarter of 2022. The MSCI Emerging Markets Index fell by 5.4% in Australian dollar terms in the three months with the largest declines being registered in Eastern Europe, where markets dropped by almost 17%. Neither were Asian shares immune, falling by about 8%, with further weakness in Chinese stock prices. Conversely, Latin American stocks held up well, with the region finishing almost 11% higher. A characteristic of the quarter was a stronger US dollar, to a significant extent caused by Federal Reserve Governor Jerome Powell’s comments and decision to raise US short-term interest rates considerably to fight intensifying inflationary pressures, which caused another round of central bank interest rate hikes.
Across Latin America, strength was most evident in Brazil and Chile, the former experiencing the first round of the presidential election and the latter recording a vote on a new Constitution, which was not passed. Peruvian shares were resilient as the new left-leaning government of Pedro Castillo found it challenging to implement its agenda. Mexican stock prices slightly up in AUD terms, although shares were affected by a high inflation reading and interest rate increases.
Chinese equities resumed their negative trend in the third quarter as worries about the economy overpowered news of negotiations aimed at resolving the Chinese securities’ de-listing legislation in the United States. Further concerns about demand weakness in semiconductor and hardware orders resulted in sharp declines in stock prices in South Korea and Taiwan. Indian equities continued to perform well as the country’s economic dynamism attracted investors, although some are beginning to show concern about valuations.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2022-08-1.pdfAugust, 2022
Ongoing concerns over the possibility of global economic recession, coupled with high levels of inflation, continued to pressure returns in the developing world in August. However, the MSCI EM Index was up by more than 2% in Australian dollar terms over the month with Eastern European share prices falling nearly 9%. Stock prices in Asia and Latin America rose by 2% and 4.5% respectively. US Federal Reserve Governor Jerome Powell’s comments in Jackson Hole, which reinforced the priority of defeating inflation and suggested more increases in US interest rates will be forthcoming, acted to further strengthen the US dollar against global currencies.
Significant equity price declines were witnessed in the Czech Republic and Poland as Russian gas supplies were reduced markedly for “urgent maintenance” reasons. In Turkey, share prices finished the month almost 25% higher despite severe inflationary pressures, but after another interest rate cut and a strong tourist season. Markets in the Gulf did not change dramatically over the month as crude oil prices were tempered by negative economic forecasts. South African stocks were hurt by lower metals prices.
Within Asia, the Chinese market rose by 2% as worries about the property market were offset by the announcement of a possible agreement regarding proposed US Congressional legislation to de-list Chinese stocks from US exchanges. Southeast Asian markets finished generally higher on robust inflation expectations while share prices in South Korea and Taiwan were adversely affected by investor concerns over semiconductor volumes.
In Latin America, Brazilian stock prices rose more than 8% as the presidential election moved into higher gear and economic indicators improved. Chilean share prices increased but more modestly as the new constitution is likely to be voted upon. In Mexico, the market fell by 3% after a higher-than-expected inflation reading.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2022-08.pdfJuly, 2022
In contrast to developed markets, emerging markets did not participate in the market recovery in July. This occurred primarily after the US Federal Reserve’s seventy-five basis point increase in short-term interest rates, which convinced some investors that further hikes would be unlikely. Emerging markets central banks were also active in raising short-term interest rates. The MSCI EM Index fell by 1.7% over the month while the MSCI EAFE Index rose by 3.5%%. Latin American shares rose by 2.7% while eastern European stocks ended the month almost unchanged and Asian equities fell by 2.7%%.
The most important movement in the month was the close to eleven percent fall in Chinese equity prices, amid ongoing worries over property development, COVID-19 lockdowns, and technology company regulations. Elsewhere in Asia, most stock prices finished slightly down save for Taiwan and South Korea, where there were significant recoveries in hardware and semiconductor stock prices. Indian share prices rose by almost 8%, helped by new measures to cut taxes and attract foreign investment.
Markets in Europe were relatively stable in July with Hungarian shares finishing the month only 0.2% down after the spring pressures of the Russian invasion in Ukraine and European Union issues. Enthusiasm for South African stocks was muted due to weaker commodity prices. Equity prices in Gulf markets ended higher, aided by still high crude oil prices.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/2022-07-30_LazardEmergingMarketsEquityFund_FactSheet_2022-07.pdfJune, 2022
Ongoing conflict in Ukraine and associated exacerbated inflationary effects, potentially jeopardizing economic growth, concerned investors in the second quarter of 2022 and significantly hit emerging markets equities. The MSCI Emerging Markets Index fell by 3.3% over the period with Latin American markets sustaining the largest decreases, falling by 14.7%. In the face of ongoing Russia-Ukraine conflict in Eastern Europe, stock prices fell there by similar amounts. Asian shares were more resilient, aided by a strong rally in Chinese internet platform company stocks in June. The period included numerous liftings of interest rates by central banks and a strengthening US dollar on risk aversion.
Despite constructive performance in April and May, worries about global recession caused Southeast Asian markets to fall. Taiwanese and South Korean markets were hurt by weakness in semiconductor and hardware orders. In China, concerns over the economy continued until June, centered on entire city lockdowns and potential de-listings of Chinese companies from US stock exchanges. Major recoveries in Chinese internet platform company stocks in June enabled it to record a positive quarterly return, unique across the asset class. Concerns about global economic growth were also a big factor across Latin America. All major markets finished substantially lower as commodity prices were impacted. Chilean stocks suffered from lackluster interest in the drafting of a new constitution. Colombian equities were hit by the election of leftist President Gustavo Petro.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2022-05-1.pdfMay, 2022
Amid multiple interest rate increases across the world, equity market performance diverged across various countries in the de veloping world in May. Weighed down by the Australian dollar appreciating 1.6% against the US dollar, the MSCI Emerging Markets Index fell 0.5% in the month.
Latin America was the best performing region in May, with stock markets rebounding from last month’s pessimistic macro backdr op and rising 7.2%, thanks to ongoing optimism over demand for certain commodities. The stalled agendas of several new left -leaning governments in Chile and Peru provided an additional boost to the equity markets there. Colombia’s equity market rose 12.3% after a more moderate challenger, Rodolfo Hernández, emerged in the country’s presidential election, and Brazil’s stock market climbed 7.4%, as inv estors appeared to be getting more comfortable with the likelihood of a Lula government.
In emerging Asia, equity markets finished marginally lower and modestly underperformed the broader market index. Indian and I ndonesian equities were the region’s worst performers after recent strong gains. Helped by more stimulative measures, Chinese share pri ces ended the month modestly higher on some expectations that authorities would ease up on regulating internet platform companies, and news that COVID-19-driven lockdowns in several major cities might end soon. Thai stock prices rallied on improving prospects for tourism
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2022-05.pdfApril, 2022
Pressured by the rising interest rate environment in many countries, concerns about the global economic recovery, and the ongoing fallout from the Russia-Ukraine conflict, the MSCI Emerging Markets Index declined 0.2% in April. Most emerging markets currencies ended the month weaker against the US dollar, as the Federal Reserve signaled upcoming increases in short-term interest rates. After having benefitted from higher expectations of inflation and the surge in commodity prices following the Russian invasion of Ukraine, equity markets in Latin America were weak across the region. Brazilian and Colombian equity prices fell on political concerns as elections came into focus. Chilean shares suffered from lackluster interest in the drafting of a new constitution. Like most countries, Mexico and Peru recorded high inflation figures, which depressed their stock markets.
Several Eastern European markets, most prominently Poland and Hungary, received a second dose of negative returns after February’s initial hit. Poland was adversely impacted by Russia’s decision to cut energy exports to the country while Hungary experienced its own disagreement with the European Union over rule-of-law violations. South African share prices fell significantly due to serious flooding in the KwaZulu-Natal province, which interrupted port shipments and resulted in casualties. Turkey’s stock market once again proved resilient despite the country suffering from hyperinflation of over 60%.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2022-04.pdfMarch, 2022
Equity markets in the developing world experienced a challenging and dramatic series of events in the first quarter, highlighted by global monetary tightening and Russia’s invasion of Ukraine. The MSCI Emerging Markets Index fell 9.9% over the period, with dramatically differing regional performance. Eastern European stock prices fell over 70%, as Russia’s invasion into Ukraine resulted in unprecedented sanctions and Russia’s ultimate removal from the universe of MSCI indices. Emerging Asian stocks also suffered, falling 11.6%, as ongoing issues in China worried investors. Latin American markets actually rose 23.2%, as they were viewed as ignored and likely beneficiaries of higher commodity prices caused by the West’s sanctions on Russia.
Unsuccessful diplomatic attempts to ease geopolitical tensions stemming from a major Russian troop build-up along the Ukrainian border starting in November 2021 led ultimately to a full-scale Russian invasion of Ukraine on 24 February 2022. This caused widespread destruction and casualties and prompted the US and its Western allies to levy sanctions on Russia, which proved to be so severe that they forced country’s central bank to establish capital controls and close the Moscow Exchange. The Russian stocks were ultimately removed from the MSCI Emerging Markets Index and therefore experienced a 100% decrease in value over the quarter. While sanctions adversely impacted some regional markets, most prominently Hungary and Poland, they also helped some stock markets in developing countries that stand to benefit from higher expected commodity prices caused by a shortage of Russian goods due to harsh punitive measures. Middle Eastern markets, as well as crude oil producers, were clear beneficiaries.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2022-03.pdfFebruary, 2022
Russia’s decision to invade Ukraine on 24 February 2022 dominated worldwide news and capital markets during the month. The MSCI Russia Index fell 54.1% (but did not reprice in the final two days because its source is the Moscow Exchange which was closed). There were a few neighboring markets which also experienced sizable declines but equities in emerging Asia fell 5.2% while in Latin America, they actually finished the month 1.8% higher. The MSCI Emerging Markets Index recorded a loss of 5.8%. One outcome of the invasion was the likely effects of sanctions would result in commodity price strength, which helped some energy and materials stocks outside Russia. Southeast Asian markets with significant oil or commodity production finished strongly. Stock prices in South Korea rose marginally while Taiwanese share prices dipped, possibly due to investor concerns over its relationship with China.
The Russian invasion of Ukraine, which began across the main part of the country was met with immediate sanctions and united opposition by Western governments. Across the region encompassing Europe, the Middle East, and Africa (EMEA), commodity-rich markets such as South Africa, Saudi Arabia, Qatar, and the United Arab Emirates rose over the month, aided by the invasion’s likely effect on Russian energy sanctions. In particular, sanctions on the Russian Central Bank had the effect of restricting the domestic Russian flow of money and was met with increasing capital regulations. This resulted in the Moscow Exchange being closed and had the effect of severely distorting performance. By sector, energy shares in Russia sustained the largest declines and resulted in the overall worst sector performance. However, consumer discretionary, and communications services also fared poorly. Materials and industrials were sectors with significantly better performance.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2022-02.pdfJanuary, 2022
Boosted by a weakened Australian dollar, emerging markets stock prices gained in January 2022 despite mounting anxiety about likely tightening monetary policy and decreases in global liquidity and growing diplomatic tensions over the Russian-Ukrainian border troop buildup. Stock markets in both the developed and developing world fell, with the latter outperforming the former. With the Australian dollar depreciating 2.7% against the US dollar in January 2022, the MSCI Emerging Markets Index climbed 1.2% in the month.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2022-01.pdfDecember, 2021
Dragged down by poor visibility over Chinese internet regulations and rising ongoing coronavirus risks, equity markets in the developing world retreated modestly in the fourth quarter. The MSCI Emerging Markets Index fell 1.9%, with the sharpest declines recorded in Eastern Europe. The drops in Latin American and emerging Asian stock markets were comparatively small. Several issues dominated the quarter, including the emergence of a new strain of coronavirus called Omicron, which appears to be more contagious but also less deadly. Additionally, the US Federal Reserve signaled a reduction in its quantitative easing policy, which should result in less market liquidity. Lastly, many central banks continued to raise short-term interest rates as the global recovery materialized.
Contributors to Performance:
▪ Korea-based chipmaker SK Hynix rose as spot memory prices rebounded.
▪ Taiwanese integrated circuits maker Novatek Microelectronics rebounded on bullish sentiment about the company’s outlook for 2022.
▪ Quanta Computer, a Taiwanese manufacturer of notebook computers and related equipment, saw its stock price climb after reporting strong third-quarter margins and issuing upbeat fourth quarter guidance. The company was similarly upbeat about Cloud Service Provider server demand for 2022.
▪ Wiwynn traded higher on expectations that the Taiwan-based cloud information technology provider will benefit from its major customer Meta’s announced aggressive capital expenditure program for next year.
▪ Telkom Indonesia climbed after the Indonesian telecom services company reported strong-third quarter results, with improving growth trends and easing competition. Shares received another boost on news of the successful listing of Telkom Indonesia’s tower company, Mitratel.
October, 2021
Equity markets in the developing world finished October 2021 approximately 3% lower, as widely differing performance was witnessed by region. Eastern European and Middle Eastern stocks fell by more than 0.5% and Asian shares closed more than 2.5% lower. In contrast, Latin American equities slumped by roughly 9%, mainly on concerns over fiscal pressures in Brazil.
Contributors to Performance:
• Shares of Bank Mandiri gained on positive sentiment after the Indonesia-based lender reported improving loan growth in the second half of 2021 as the country’s vaccination program gains momentum. • Russian energy company Lukoil saw its stock price rise on expectations of continued earnings momentum on the back of rising oil prices and production growth.
Detractors from Performance:
• Shares of China Vanke traded lower after the Chinese real estate development company reported slower volume growth, as well as margin pressures due to higher land costs. • The decline in the stock price of China-based lender China Construction Bank was due to concerns over the slowing economy and the potential for deteriorating asset quality in the property sector
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2021-10_en.pdfSeptember, 2021
A combination of unusual changes in Chinese corporate policy and regulations, news of intensifying distress for heavily indebted Chinese property company Evergrande, and a spike in the long-term government bond yields drove emerging markets equities lower in the third quarter 2021. The MSCI Emerging Markets Index fell 4.5%, although regional performance was very different. Stocks markets in Latin America and emerging Asia were battered, falling more than 9% and 6%, respectively, while strong oil prices helped Eastern European stock markets rise impressively.
Contributors to Performance: • Russia-based energy company Gazprom rose due to a spike in gas prices. • Mexico-based telecom company America Movil outperformed, as economic sentiment and profit outlooks increased in Mexico. • Shares of India-based passive telecom infrastructure provider Indus Towers gained after the government announced a telecom relief package with a moratorium on adjusted gross return (AGR) and spectrum dues, improving the viability of one of Indus Tower’s largest customers.
• Indonesian telecom services company Telkom Indonesia climbed, thanks to an improving domestic market, with both service revenues and margin trends improving.
• Chinese state-owned coal mining company China Shenhua gained after reporting strong year-over-year increases in coal sales and power generation.
Detractors from Performance: • Korea-based chipmaker SK Hynix traded lower amid concerns of memory demand slowdown. • China-based insurer Ping An Insurance retreated after disclosing an ongoing regulatory probe into its past real estate transaction
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2021-09_en.pdfAugust, 2021
In the midst of global events and headlines over the Taliban victory in Afghanistan, increasing Chinese regulations, and a tempered tone by the US Federal Reserve, equity markets in the developing world still advanced 3.2% in August. Stock markets in Eastern Europe and the Middle East were strongest, rising by over 5%. Despite ongoing news over new regulations and practices in areas like hours of gaming and tutoring in China, powerful rebounds in Southeast Asian equity markets resulted in Asian returns increasing by 3.2%. Equity markets in Latin America were the laggard region but still finished 1.4% higher.
Contributors to Performance:
• Mexico-based telecom company America Movil outperformed as economic sentiment and profit outlooks increased in Mexico. • Chinese state-owned coal mining company China Shenhua gained after reporting strong year-over-year increases in coal sales and power generation. • Hungary-based lender OTP Bank traded higher after reporting better-than- expected second-quarter earnings led by strong operating performance. • Russia-based lender Sberbank advanced after reporting strong second-quarter results driven by payment business growth, improving core business, and business-to-business services performance. • India-based lender Axis Bank climbed after reporting strong earnings, highlighted by robust year-over-year growth in net interest income and retail loans.
Detractors from Performance: • Chinese appliance manufacturer Gree declined after reporting lower-than-expected air conditioning sales during peak season. • Despite posting strong second-quarter earnings, shares of Coway faltered as the firm’s earnings outlook deteriorated due to the lockdowns in Malaysia
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2021-08_en.pdfJuly, 2021
Emerging markets equities were negatively affected mainly by changing regulatory issues and rumors of possible other business adjustments in China during July 2021. Additionally, growing infection rates of the COVID-19 Delta variant dampened investors’ expectations of economic recovery. The MSCI EM Index fell by 4.7% over the month, with Latin America falling by 2.0% and Asian shares finishing 6.1% lower. Emerging markets stocks across the region encompassing Europe, the Middle East, and Africa (EMEA) ended the month up 2.2%. Chinese shares dropped by 12.0% in July 2021. (Index returns are net of fees and in Australian dollar terms.)
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2021-07_en.pdfJune, 2021
Equity markets in the developing world advanced in the second quarter on investor confidence that the global economic recovery will continue uninterrupted despite the emergence of considerable inflation risk. This was due to supply-chain bottlenecks, a surge in commodity prices, and sharp increases in China’s factory-gate prices. Investors were increasingly worried that stimulus measures, combined with post-pandemic economic recoveries, would result in a significant rise in global inflation, which, in turn, could force key central banks to retreat from their accommodative monetary policies. In June, the Federal Reserve increased its expectations for short term inflation but not for mid and long-term inflation. In the quarter, the MSCI Emerging Markets Index advanced 6.6%, raising its year-to-date gain to 10.4%. (Index returns are net of fees and in Australian dollar terms.)
Contributors to Performance:
• Hungary-based lender OTP Bank gained after reporting strong first-quarter earnings, with profits reaching a historically high level and loan volumes increasing sharply.
• Sinopharm Group rose on expectations that the China-based pharmaceuticals and medical devices distributor would benefit from distributing vaccines domestically and internationally.
• Russian oil and gas company Lukoil traded higher on rising oil prices and increased demand from economic reopenings.
• Brazil-based lender Banco do Brasil advanced ed on improving investor sentiment as Brazil’s vaccination program begins to pick up and banks continue to deliver a better earnings outlook. Brazil-based lender Banco do Brasil climbed after reporting a return on equity of 15.1%, reported its highest profitability since the pandemic began.
Detractors from Performance:
• China-based insurer Ping An Insurance retreated after reporting muted first-quarter growth due to impairment charges for its China Fortune Land investments. Shares came under additional pressure over concerns about potential dilutive mergers and acquisition in restructured assets. To combat the weakness in sales growth, Ping An Insurance has been launching new products and sales promotions.
• Chinese real estate developer China Vanke fell after reporting disappointing first-quarter earnings due to a decline in gross profit margins.
• Taiwan-based display drive integrated circuit (IC) supplier Novatek Microelectronics faltered on concerns of the panel cycle peaking and driver IC prices falling.
• China-based lender China Construction Bank traded lower as part of a larger decline in the Chinese and Hong Kong financial sector.
May, 2021
Despite concerns over global inflation and possible new regulation of Chinese internet companies, continuing confidence in a global economic recovery helped markets in the developing world in May. The MSCI Emerging Markets Index rose by 2.1%, in Australian dollar terms, over the month as Eastern European markets performed particularly strongly, rising by 10.4%. Latin American markets also experienced robust performance, with an increase of 7.8%. Asian markets performed less well, but still recorded a gain, increasing by 1%. A weakening US dollar helped emerging markets perform better than developed markets despite still-high COVID-19 infection rates in countries like India and Brazil.
Contributors to Performance: • UPL, an Indian agro-chemical company, outperformed on strong demand for ag-chem products and upbeat guidance. • OTP, a Hungarian bank, reported strong first quarter earnings. • Shares of Banco do Brasil, a Brazilian bank, gained on improving investor sentiment as Brazil’s vaccination program begins to pick up and banks continue to deliver a better earnings outlook. • Coway, a Korean manufacturer and distributor of air and water purifiers, reported robust first quarter results. • Sberbank, a Russian bank, outperformed with the Russian economy benefiting from robust commodity prices, leading to upward revisions for ROE guidance from the bank.
Detractors from Performance: • Novatek Microelectronics, a Taiwanese manufacturer of integrated circuits, experienced profit taking on concerns that margins may be near a peak. • ASM Pacific Technology, manufacturer of back-end equipment for the semiconductor industry including for assembly, packaging and surface mounting, experienced profit taking as did most Asian semiconductor related stocks. • Shares of Kasikorn Bank, a Thai bank, fell on the back of a subdued growth trajectory as the pandemic continues in Thailand, leading to concerns around asset quality
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2021-05_en.pdfApril, 2021
Following an uneven first quarter, in which technology and growth shares initially led the market higher and then economy-sensitive value stocks performed well and moderated the move, emerging markets ended modestly higher in April. The MSCI Emerging Markets Index rose by 1.1%, in Australian dollar terms, with equities rising by 2.2% in Latin America, 1.0% in Asia, and 0.2% in Eastern Europe. Contributors to Performance:
• Shares of Sinopharm Group, a Chinese distributor of pharmaceuticals and medical devices, rose on expectations they would benefit from distributing vaccines within China and internationally. • The management of Siam Cement, a Thailand-based diversified industrial with interests in cement, petrochemicals, paper, and building products, provided upbeat guidance for its petrochemical operations with higher prices and recovering demand, helped out by global supply constraints. • Novatek Microelectronics, a Taiwanese designer and manufacturer of integrated circuits, reported strong first quarter results with record margins on the back of price hikes and robust demand for its products. • Shares of GlobalWafers, a Taiwanese manufacturer of silicon and solar wafers, gained on expectations for strong sales of integrated circuits and rising prices as the world grapples with a global supply crunch. • ASM Pacific, a manufacturer of semiconductor assembly and packaging equipment, reported strong first quarter results with management guiding for healthy bookings in 2021 and a recovery of margins.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2021-04_en.pdfMarch, 2021
Optimism over the direction of expected economic growth, propelled by rising COVID-19 vaccinations, helped equity prices in the first quarter of 2021. The MSCI Emerging Markets Index rose by 3.6%, as measured in Australian dollar terms, over the quarter with increases of 4% and 3.5% in Eastern Europe and Asia, respectively. Volatile political events in Latin America resulted in a decline of 4.1%. Contributors to Performance: • Shares of Novatek Microelectronics, a Taiwanese manufacturer of integrated circuits, rose on expectations for a strong first half of 2021 in terms of sales and margins.
• Shares of Hon Hai Precision, a Taiwanese company offering manufacturing services to the technology industry, rose on the back of positive momentum for its electric vehicle platform after announcing a few recent joint ventures. • Grupo Mexico, a Mexican mining company, benefited from a weaker peso and positive sentiment for base metals and copper price appreciation.
• UPL, an Indian manufacturer and distributor of agro chemicals, benefited from positive sentiment as global crop prices rose. • China Merchants Bank, a Chinese bank, posted strong fourth quarter performance with an improving retail credit cost outlook. Detractors from Performance: • Shares of Banco do Brasil, a Brazilian bank, declined on rumors of a change in the CEO and government intervention of the proposed cost cutting plans. • Brazilian insurance company BB Seguridade Participacoes reported weaker fourth quarter results and traded lower with the broader Brazilian market given the increase in political risk. • Coway, a Korean manufacturer and distributor of air and water purifiers, announced results in line with expectations, but guided for flattish operating margins due to rising labor costs and increasing IT investments. • Shares of Samsung Electronics, a Korean manufacture of electronic goods, underperformed after posting strong gains in 2020. • Unilever, a global consumer goods company, reported weaker operating margin performance from an increase in marketing spending and COVID-19 related costs.
February, 2021
Shares in the developing world rose modestly in February as optimism increased over increasing global vaccinations early in the month but were mostly offset by rising US Treasury yields towards month-end. The MSCI Emerging Markets Index fell by 0.1%, in Australian dollar terms, over the month with markets in Eastern Europe and Asia finishing higher and Latin American equities falling by about 4%. Commodities such as copper and crude oil performed very strongly in the month and helped certain currencies.
Contributors to Performance: • SK Hynix, a Korean semiconductor company, rose on the back of rising memory prices.
• Novatek Microelectronics, a Taiwanese designer of integrated circuits, reported stronger gross margins in its most recent quarter. • GlobalWafers, a Taiwanese developer of semiconductor wafers, rebounded as its acquisition of Siltronic grew more likely over the month. • China Vanke, a property development and management company, rose as its January sales value hit a new high. Additionally, real estate was a top performing sector over the month following the rise in US bond yields.
Detractors from Performance:
• Brazilian financial Banco do Brasil traded lower following the replacement of Petrobras’ CEO by President Jair Bolsonaro as political riskhas increased for other state-owned enterprises like Banco do Brazil. Speculation that Banco do Brasil’s CEO would also be stepping down further pressured the share price. • Unilever, a global consumer goods company, reported weaker operating margin performance from an increase in marketing spending and COVID-19 related costs.
• Petrobras Distribuidora, the fuel distribution network of Brazil’s Petrobras, also weakened on an increase in political risk following the replacement of Petrobras’ CEO.
• Russian telecom company Mobile TeleSystems weakened over the period.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2021-02_en.pdfJanuary, 2021
The S&P/ASX 200 Accumulation Index rose by 0.3% during the month. Consumer Discretionary (+4.7%), Communication Services (+2.7%), and Financials (+2.2%) outperformed, whilst REITs (-4.1%), Industrials (-3.0%) and Healthcare (-1.8%) underperformed. COVID-19 news continued to dominate investor behaviour as global COVID-19 cases passed 100 million in January 2021. A slow rollout of the new vaccines coupled with the emergence of several new, more infectious strains added to anxiety and locked down the United Kingdom. On 31 January 2021, NSW marked its second week of zero locally acquired COVID-19 cases. Contrastingly, Western Australia announced a five-day period of emergency mobility restrictions after the reported detection of one case of the UK variant in the community. The United States saw a transition in Presidency as Joe Biden was sworn in as the 46th President of the United States on 20 January 2021, but only after a riot, and a second impeachment of former President Trump highlighted the sharp divide in the country.
During the month, the Lazard Australian Equity Fund returned -0.7% (net of W Class fees), underperforming the S&P/ASX 200 Accumulation Index which returned 0.3%
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2021-01_en.pdfDecember, 2020
Share prices in the emerging markets rallied sharply in the fourth quarter of 2020 as announcements of high efficacy vaccines more than offset the negative impact of increasing COVID-19 infection rates in many countries. Additionally, a last-minute trade agreement between the European Union and United Kingdom and a fiscal stimulus bill in the United States supported markets. The MSCI Emerging Markets Index rose by 11.2%, in Australian dollar terms, during the quarter, with by far the largest increases being registered in Latin America, which recovered by about 25%. Asian and Eastern European markets increased by more than 10%. The period was somewhat different from previous quarters in that economy-sensitive stocks, for the first time in a considerable period, performed relatively well. Contributors to Performance:
• Korean companies Samsung Electronics and SK Hynix, a manufacturer of electronic products and a semiconductor company, respectively, benefited from rising memory prices.
• OTP, a Hungarian bank, experienced higher loan volume and stabilizing net interest margins, and was boosted on optimism a COVID-19 vaccine is near.
• Globalwafers, a Taiwanese silicon wafer manufacturer, announced a takeover agreement with Siltronic, which could further consolidate the silicon wafer business. • Shares of Baidu, a Chinese online search engine, rose as the Chinese advertising market continued to recover and after the company announced it would increase focus on its autonomous driving software. Detractors from Performance: • Shares of Chinese companies, CRRC and China Mobile, respectively, a manufacturer of train locomotives and carriages, and a telecom services company, all declined on confirmation, or concerns, that they would be on the list of companies included in an executive order signed by President Trump that barred US investors from investing in companies with links to the Chinese military. • Anhui Conch, a Chinese cement company, experienced weaker-than-expected demand driven by heavy rains, which led to higher inventory levels and weaker pricing. • CIB, an Egyptian bank, was hurt by uncertainty following the resignation of the Chairman due to pressure from the Central Bank of Egypt. • UPL, an Indian agrochemicals business, underperformed on lingering concerns related to an auditor resigning from a project on ones of its subsidiaries.
We expect that emerging markets economies will benefit further as the vaccine is distributed in developed markets during the first half of 2021 and in emerging markets later in 2021 and 2022 So far there has not been strong reasons to raise interest rates given low inflationary pressure. However, if economic growth is very strong, interest rates may be adjusted higher. We believe these factors, along with a less strong US dollar, bode well for value companies, in particular.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2020-12_en.pdfOctober, 2020
Despite a surge in COVID-19 cases in both Europe and the United States, share prices in the developing world continued to rise in October. The MSCI Emerging Markets Index rose by 4.2%, in Australian dollar terms, with sharply divergent regional performance between Eastern Europe, which fell by almost 8% and Asia, which rose by 5.4%. Latin American equities finished just under 1% higher.
File: https://commentary.quantreports.net/wp-content/uploads/2020/11/LazardEmergingMarketsEquityFund_FactSheet_2020-10_en-unlocked.pdfticker: LAZ0003AU
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release_schedule: Monthly
fund_features:
Lazard Emerging Markets offers access to an attractive asset class with low correlation to global equities over the long term through one of the world’s largest and most experienced EM investment team. The Fund’s objective is to achieve total returns (including income and capital appreciation and before the deduction of fees and taxes) that exceed those of the MSCI Emerging Markets Index by 3% per annum over rolling five-year periods.
- The Fund may invest up to 15% in the frontier markets. Frontier markets are a subset of emerging markets and are characterised by factors such as lower capitalisation companies, market regulation and liquidity.
- Asset allocation: Emerging markets equity and equity like securities and securities convertible into equity securities (90% to 100%), Cash (0% to 10%).
- Considered as a very high risk/return investment.
manager_contact_details: Array
asset_class: Foreign Equity
asset_category: Emerging Markets
peer_benchmark: Foreign Equity - Emerging Markets Index
broad_market_index: World Emerging Markets Index
structure: Managed Fund