Acadian AM launches EM equity fund

Acadian Asset Management has launched the Acadian Enhanced Emerging Markets Equity Fund in Australia.

The new strategy aims to generate long-term returns for Australian wholesale investors through a diversified portfolio of approximately 500 emerging market companies.

This is coupled with Acadian's systematic style of investing, which includes quantitative models and algorithms to make investment decisions, a method Acadian has applied to the sector since 1994.

Based on data from eVestment, the median systematic manager in the eVestment Global Emerging Markets All Cap Core Equity universe outperformed their fundamental peers over one-, five-, 10- and 20-year periods (after fees and based composite performance of peer groups), the active manager said.

Acadian Australia chief executive Gillian Savage said the launch comes amid the sector's stellar growth over the past decade, accounting to the expansion of the investable universe, improved data coverage and reduced trading costs.

"We are global specialists in systematic investing and our approach benefits investors over the long term by generating a more consistent return profile, which is a highly valuable attribute in an asset class like emerging markets because it can experience periods of high volatility," she said.

"With a large number of stocks contributing small amounts to the total return over time, the strategy is designed to generate incremental returns above the benchmark while reducing active risk."

Director of wholesale markets Mark Mukundan said the fund will provide access to a large pool of companies with returns closely linked to local influences.

"This fund has been designed to be a core emerging market holding, due to its high stock diversity, multifactor approach, and low stock-specific risk profile," he said.

"It could also be a complementary and differentiating feature if positioned alongside higher risk concentrated strategies or a possible replacement for an index allocation, given the fund is actively managed and competitively priced at a management cost of 0.47% which is lower than existing MSCI EM Index replication strategies."

Colonial First State has been selected to serve as responsible entity.

As at 31 December 2024, Acadian has $189 billion in assets under management and $39 billion is allocated in emerging market strategies.