Emerging Markets Team
Investment Philosophy & Process Overview
Artisan's Emerging Markets investment team believes that emerging markets present investors with two distinct characteristics: higher economic growth potential than developed economies and greater volatility associated with their emerging nature. The team seeks to identify emerging market companies that are uniquely positioned to benefit from that growth potential and possess a sustainable global competitive advantage that can assist in weathering challenging economic environments.
The investment process focuses on three core elements.
Sustainable Earnings
The team believes that over the long term a stock's price is directly related to the company's ability to deliver sustainable earnings. The team determines a company's sustainable earnings based upon financial and strategic analyses. The team's financial analysis of a company's historical balance sheets, income statements and statements of cash flows focuses on identifying historical drivers of return on equity. The team's strategic analysis examines a company's competitive advantages and financial strength to assess sustainability.
Risk Analysis
The team believes that a disciplined risk framework allows greater focus on fundamental stock selection. The team incorporates its assessment of company-specific and macroeconomic risks into its valuation analysis to develop a risk-adjusted target price. The team's risk-rating assessment includes a review of the currency, interest rate, monetary and fiscal policy and political risks to which a company is exposed.
Valuation
The team believes that investment opportunities develop when businesses with sustainable earnings are undervalued relative to peers and historical, industry, country and regional valuations. The team values a business and develops a price target based on its sustainable earnings and cash flow expectations and risk analysis.
Important Investment Risk Disclosure
Important Investment Risk Disclosure
Emerging Markets Strategy
International investments involve special risks, including currency fluctuation, lower liquidity, different accounting methods and economic and political systems, and higher transaction costs. These risks typically are greater in emerging markets. Such risks include new and rapidly changing political and economic structures, which may cause instability; underdeveloped markets; and higher likelihood of high levels of inflation, deflation or currency devaluations.