2024-08-02 09:00:00 ET
Summary
- Ariel Emerging Markets Value Composite increased +2.37% gross of fees in the quarter, trailing both the MSCI EM Index and MSCI EM Value Index, which returned +5.00% and +5.08%, respectively.
- We initiated two new positions in the quarter.
- By comparison, we successfully exited Taiwanese testing and packaging solutions company for semiconductors and integrated circuits, King Yuan Electronics Company, Ltd. on valuation.
Emerging market equities delivered positive returns in the second quarter. Investor enthusiasm around artificial intelligence ((AI)) drove strong performance from the tech-heavy Taiwanese and South Korean market; China rallied following new government support measures to stabilize the real estate sector and boost the economy; and India outperformed on the expectation of political and economic policy continuity under the new ruling coalition. By comparison, Brazil remains challenged as rising long-term interest rates and concerns around an expanding fiscal deficit continue to be problematic. A higher probability of constitutional and judicial reforms in Mexico also weighed on investor sentiment. 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 Composite increased +2.37% gross of fees (+2.13% net of fees) in the quarter, trailing both the MSCI EM Index and MSCI EM Value Index, which returned +5.00% and +5.08%, respectively....
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Ariel Investments Emerging Markets Value Q2 2024 Commentary