October, 2020
Contributing to the Fund’s underperformance was poor stock selection in China; notably underweights to Meituan Dianping and Tencent Holdings. Stock selection in South Africa and India also weighed on returns; the latter including an underweight to Axis Bank. At the country level, our overweight to Russia was the biggest detractor; the market there falling sharply amid weaker commodity prices. Stock selection within the information technology space also weighed on returns, including overweights to Chinese names Shenzhen Sunway Communication Co. and Beijing Sinnet Technology Co. In terms of strategic factor performance, the Fund’s value exposure detracted from returns as growth stocks continued to outperform, while our momentum bias added value. In contrast, the Fund benefited from an ex-benchmark exposure to Canada; almost all of which was driven by our holding in First Quantum Minerals. Stock selection in Taiwan and South Korea was also positive for the month; the latter including an overweight to Hana Financial Group. Other notable positions to add value were an ex-benchmark exposure to Argentina’s MercadoLibre and an overweight to China’s Guangzhou Automobile Group.
Moving forward, we maintain underweight exposures to China, Saudi Arabia, Malaysia and Thailand. We also maintain overweight exposures to Russia, South Korea and Brazil, as well as tilts toward value and momentum factors; which is in line with our strategic preferences.
ticker: RIM0038AU
commentary_block: Array
factsheet_url:
Under Fund Factsheet https://russellinvestments.com/au/solutions/funds-and-strategies/REMFA
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