Russell Jadwa Emerging Markets Equity Fund:

The Jadwa Emerging Markets Equity Fund invests in the Emerging Markets Equity Fund of Russell Jadwa Shariah Based Fund plc, which is a multi-manager fund managed in compliance with the Shariah guidelines of its Shariah Board.

Why invest in Emerging Market Equities?
Return: Strong growth potential from fast developing industries and economies.
Risk: Performance of a single emerging market or region can be highly volatile and difficult to predict. A broadly diversified exposure to global emerging markets can provide access to these exciting returns, but at a more manageable level of volatility.
Outperformance: Emerging markets are less researched than developed markets. This creates an opportunity for strong active managers to find better relative investment opportunities than in developed markets. A global mandate also allows managers to vary the allocation to different countries and regions.

 

The Multi-Style Fund Managers:
The following Fund Managers have been selected from the range of emerging market managers ranked by Russell’s analysts.

Name Weight Description Legg Mason 40% Founded in 1899 and headquarted in Baltimore, Legg Mason is a global investment powerhouse managing approximately $944 billion around the world for many types of different clients. The team running the mandate is based in London, and is part of the ex Citigroup asset managemnet arm that Legg Mason acquired in 2005. SWIP 40% Scottish Widows Investment Partnership (SWIP) is one of Europe’s largest asset management companies, and is part of the LIoyds TSB Group, one of the world’s largest banks. SWIP manages assets in excess of $206 billion with a broad product range. Principal 20% A large global asset management firm with approximately $214 billion focusing mainly on retirement plans and other institutional clients. The firm has a team of 476 investment professionals world wide. The mandate within the Emerging Markets fund will be run out of the company’s office in Des Moines, Iowa.

Legg Mason

Stock selection: Russell views the core strength of this team as the depth and quality of its stock research, which is at the heart of its portfolio management process. Legg Mason believes that there are two key determinants of stock price performance: valuation, based on fundamental characteristics such as growth rates, risk factors and cash flows in the form of dividends; and surprise changes to projected figures, considered to convey important information on current and future prospects of companies.

Portfolio construction and return drivers: The team divides the market into “cells” based on countries and industry sectors. The portfolio manager fills each cell with the top stocks generated by the research process. This has two key effects. First, stock selection is the greatest source of return in the portfolio. Second, given the rigorous portfolio construction methodology, the portfolio will have characteristics similar to the market. This portfolio is the one that will serve as a core of the Fund, anchoring the two more volatile and less market-like portfolios of SWIP and Principal.

SWIP

Stock selection: The Scottish Widows Investment Partnership (SWIP) team’s approach to investment starts in a similar way to Legg Mason, with in depth analysis of a broad range of stocks in the market. The team is looking for stocks whose price is below a level that fairly reflects the underlying company’s long term growth prospects. In order to do so, analysts must understand how each company generates its earnings, and be able to forecast how they will change over the long term.

Portfolio construction and return drivers: Unlike Legg Mason, when constructing the portfolio, SWIP seeks to only invest in stocks it considers to have under priced, outstanding growth prospects. The team has little regard for the country or sector characteristics of the resulting portfolio. This produces the most volatile and concentrated portfolio of the three managers with characteristics that may change significantly over time..

Principal

Stock selection: Unlike SWIP and Legg Mason, Principal’s investment process combines a quantitative approach with a qualitative overlay. Quantitative processes are ones that feed stock level data into a model to generate investment decisions. Principal gets data from many different sources covering over 1,800 companies from multiple indices. Principal’s bespoke model then generates a stock ranking. The ranking is based on the improvement of stock characteristics such as valuation, investor expectations or business fundamentals. This quantitative research is complemented and enhanced by research analyst’s qualitative analysis.

Portfolio construction and return drivers: Like SWIP, the portfolio manager will only invest in the companies he believes are most attractive, with little regard to sector or country exposure. However, the portfolio is expected to have a higher number of stocks than SWIP, and also to be less volatile.

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This information provides a brief summary (the "Summary") of Jadwa Emerging Markets Equity Fund (the "Fund"). The content of the Summary is for information purposes only. Jadwa Investment does not hold itself out as providing legal, financial or other advice via the Summary.

Investment in the Fund is governed by the fund’s Terms and Conditions. The Fund is exposed to foreign currencies and changes in the currency exchange rates may have an adverse effect on the value and prices of the units.

Investments in the Fund are not deposits and are not guaranteed. The Fund value is subject to fluctuations and the investor may not receive the full amount invested. The Fund’s past performance is not indicative of future performance. The information provided in the Summary may be changed at any time without prior notice.

Jadwa Investment is authorized and regulated by the Capital Market Authority.

 

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