PBR - Ariel Investments Emerging Markets Value Ex-China Q1 2024 Commentary

2024-07-04 05:05:00 ET

Summary

• Ariel Investments, LLC is a global value-based asset management firm founded four decades ago in 1983. Ariel serves individual and institutional investors through five no-load mutual funds and eleven separate account strategies.
• Ariel Emerging Markets Value ex-China Composite jumped +10.26% gross of fees in the quarter, significantly outperforming the MSCI EM ex-China Index’s +4.01% return.
• We purchased India-based financial company Shriram Finance Ltd., which specializes in lending for used commercial vehicles.
• We bought Columbia EM Core ex-China ETF as a cash alternative during the month.

Emerging market equities delivered positive returns in the first quarter as prospects for the global economy improved. Investor enthusiasm around artificial intelligence ((AI)) lifted the technology-heavy Taiwanese and South Korean markets; and India rallied on strong domestic growth driven by robust manufacturing activity and infrastructure spend as well as expectations for political and economic policy continuity following the Spring elections. By comparison, Brazil was a headwind on rising long-term interest rates and concerns regarding greater government interference in some of the country's bellwether companies. Supply constraints in South Africa as well as port congestion, inflation and ongoing uncertainty around domestic policy also weighed on investor sentiment there. We believe the market is over-reacting to these challenges and stand ready to take advantage of such regional pullbacks as they present new, compelling mispriced opportunities. Against this backdrop, the Ariel Emerging Markets Value ex-China Composite jumped +10.26% gross of fees (+9.97% net of fees) in the quarter, significantly outperforming the MSCI EM ex-China Index's +4.01% return....

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