Systematic Emerging Markets Strategy
The Caravan Capital Systematic Emerging Markets Strategy is a process-driven, value-focused emerging markets strategy. The top-down, disciplined approach provides broad and diversified exposure to the emerging markets.
A proprietary process is used to determine initial country target weights based on predictors of country-level performance, primarily focused on measures of value. Index sampling and other techniques are used to determine initial security weights within the countries. The strategy employs active rebalancing to maintain the value discipline, enhancing expected returns while reducing risk.
Unlike a pure, blackbox approach, the Firm's experienced investment team provides additional enhancements and tilts to the core process through fundamental and country analysis. Countries and securities are added and removed based on the Firm's expectation of index graduation or downgrades. Additionally, model overrides are implemented in cases where country or company-level factor data may be a poor representation of the fundamental reality.