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Emerging Markets Equity: Harnessing Growth

A forward-looking, disciplined strategy focused on exceptional companies that exhibit visible and persistent growth trends in emerging market countries.

We believe that companies driven by domestic demand and local consumer trends represent the future of emerging markets and global economic growth. The Strategy allows investors access to these unique growth opportunities, which may not be captured in their existing portfolios otherwise.

Why Our Active Approach to Emerging Markets?

Our active investment process, predicated on bottom-up stock selection, allows us to identify growth opportunities that are often poorly captured by many active emerging markets strategies, as well as widely used market indices.

Learn more about our Active Emerging Markets Solution vs. Passive Investing and its fit within an investor’s total portfolio allocation framework.

Finding Growth in Emerging Markets

Demographics, technology and the aspirations of a rising middle class have transformed emerging markets, creating new opportunities to invest in structural growth companies that will be the future of emerging markets economies.

Look inside our portfolio companies and their structural growth themes.

Alibaba
BTPS
A-Living
Cleopatra Hospitals
Ping An

Alibaba Group Holding

Alibaba is a leading Chinese e-commerce, cloud computing, digital media, entertainment and innovation company.

Sector: Consumer Discretionary

Country: China

Structural Growth Thesis:

  • Structural growth momentum of the company’s core businesses as well as its ability to leverage the existing platform across initiatives.
  • The stock’s dual listing reduces the perceived geopolitical risk of a single listing.
  • Its performance has historically resulted in persistent upgrades to forward-looking earnings forecasts.

BTPS

BTPS is a micro-lending company that is empowering rural impoverished women in Indonesia.

Sector: Financials

Country: Indonesia

Structural Growth Thesis:

  • The company has a low-risk business model that lends to groups of impoverished women who co-underwrite each other.
  • It has high social impact, allowing women to own and manage micro businesses where capital would typically be unavailable to them.
  • BTPS forecasts minimum lending growth of 20% from structurally growing market penetration over the next five to seven years.

A-Living Services

A-Living is a top 10 property manager in China that primarily manages residential estates, charging fees for communal property management and for value-added services.

Sector: Industrials

Country: China

Structural Growth Thesis:

  • The company operates in a consolidating industry, benefitting from increased urbanization and limited management contracts.
  • It has experienced a recent, substantial increase in square meters under management from parent companies, M&A activity and third-party business.
  • As the industry consolidates, property management fees are expected to increase.

Cleopatra Hospitals Group (CHG)

CHG is a leading private hospital group in Egypt that aims to enhance the quality and accessibility of health care in the country.

Sector: Health Care

Country: Egypt

Structural Growth Thesis:

  • The company operates within a dynamic sector that offers structural growth exposure driven by rising demand, insufficient supply and a fragmented market.
  • It is well positioned to drive consolidation in a fragmented sector with the top 5 institutional groups.
  • CHG’s growth outlook is quite compelling now and it is expected to grow driven by capacity expansion, faster growth and improved margins.

Ping An Insurance (Group) of China

Ping An is one of the world’s largest financial institutions and China’s second largest insurance company with businesses spanning across life insurance, casualty business and banking.

Sector: Financials

Country: China

Structural Growth Thesis:

  • In addition to its core life insurance business, Ping An is developing a host of disruptive and technology-driven business lines.
  • Its tech business includes an AI-driven healthcare platform, an online distributor of retail investments and a private cloud for SMEs.
  • The company collects and compiles highly relevant financial and medical data primarily from its ancillary businesses, Lufax and Ping An Good Doctor.

VanEck Emerging Markets Strategy Difference

VanEck has been investing internationally since opening its doors in 1955, and emerging markets have been at its core for over 25 years. Since its inception, our Emerging Markets Equity Strategy has been governed by its time-tested investment philosophy, process and approach to stock selection and offers a unique perspective to investing in emerging markets today.

All Cap Portfolio
Sector Exposure
Country Positioning

The Emerging Markets Equity Strategy is truly an all cap portfolio with no market capitalization bias, allowing access to entrepreneurial ownership in growing sectors within emerging markets countries.

Morningstar Wide Moat Focus Index vs S&P 500 Index

Source: FactSet. Data as of December 31, 2019. Information regarding portfolio composition, portfolio composition methodology, investment process or limits, or valuation methods of evaluating companies and markets are intended as guidelines which may be modified or changed by VanEck at any time in its sole discretion without notice.

The ongoing change in composition within each sector means that today’s domestic demand, consumer driven growth companies operate across sectors. Within the Financials sector, for example, growth opportunities exist in Micro Finance, Insurance and high quality Consumer Banking space. The Strategy’s sector exposures are a by-product of the bottom-up investment process.

Morningstar Wide Moat Focus Index vs S&P 500 Index

Source: FactSet. Data as of December 31, 2019. Information regarding portfolio composition, portfolio composition methodology, investment process or limits, or valuation methods of evaluating companies and markets are intended as guidelines which may be modified or changed by VanEck at any time in its sole discretion without notice.

Structural growth companies with domestic demand, consumer led themes tend to concentrate in certain countries; therefore, the Strategy tends to be overweight in those places (i.e., China, India, Brazil, etc.), given its bottom-up investment approach.

Morningstar Wide Moat Focus Index vs S&P 500 Index

Source: FactSet. Data as of December 31, 2019. Information regarding portfolio composition, portfolio composition methodology, investment process or limits, or valuation methods of evaluating companies and markets are intended as guidelines which may be modified or changed by VanEck at any time in its sole discretion without notice.

Fair Value Estimate

Using Morningstar’s proprietary discounted cash flow model, the analyst develops a Fair Value Estimate, which represents the intrinsic value of that company.

Moat Investing

Identify companies with sustainable competitive advantages and attractive valuations.


Proven Long-Term Emerging Markets Strategy

With an impressive performance track record, the Emerging Markets Equity Strategy has proven its ability to navigate the complexities of emerging markets over multiple business cycles and continues to provide true growth exposure to our investors today.

Morningstar Wide Moat Focus Index vs S&P 500 Index

Source: eVestment. Data as of December 31, 2019. Past performance does not guarantee future results.


Investment Team behind the Strategy

We believe an experienced Investment Team actively investing in visible and persistent growth with a disciplined valuation approach will deliver alpha to our clients through business cycles.

Portfolio Manager
Investment Team
VanEck Research Platform

The Strategy is led by Portfolio Manager David Semple who has almost 30 years of dedicated emerging markets investment experience. David has been at VanEck since 1998 and has run the Strategy since its inception in 2002.

David Semple

The Portfolio Manager is supported by a deeply experienced team of career emerging markets analysts, who are dedicated solely to this Strategy.

For more information on our Investment Team, please click here.

The Investment Team also benefits from access to research resources available across VanEck’s broader organizational platform. This includes rigorous on-the-ground research and due diligence, including firsthand interaction with company managements, which takes our investment teams around the globe.

David Semple
Areas highlighted in blue indicate where our active investment teams have visited recently to meet in person with company management or observe operations firsthand.

Fair Value Estimate

Using Morningstar’s proprietary discounted cash flow model, the analyst develops a Fair Value Estimate, which represents the intrinsic value of that company.

Moat Investing

Identify companies with sustainable competitive advantages and attractive valuations.


Important Disclosures

Structural growth refers to growth that is derived from sound business models with strong fundamentals, as well as visible and persistent earnings potential.

This is not an offer to buy or sell, or a solicitation of any offer to buy or sell any of the securities mentioned herein. Fund holdings will vary.

The reader should not assume that an investment in the securities identified was or will be profitable.

This content is published in the United States for residents of specified countries. Investors are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this content. Nothing in this content should be considered a solicitation to buy or an offer to sell shares of any investment in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction, nor is it intended as investment, tax, financial, or legal advice. Investors should seek such professional advice for their particular situation and jurisdiction.

This is not an offer to buy or sell, or a solicitation of any offer to buy or sell any of the securities mentioned herein. The Fund(s) may or may not own the securities and, if such securities are owned, no representation is being made that such securities will continue to be held. Holdings will vary for the Fund(s) and their corresponding Indices. For a complete list of holdings, please click here.

The MSCI Emerging Markets Investment Market Index (MSCI EM IMI) is a free float-adjusted market capitalization index that is designed to capture large, mid- and small-cap representation across emerging markets countries. The Morgan Stanley Capital International (MSCI) Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI benchmarks are Gross Return indices which reinvest as much as possible of a company’s gross dividend distributions.

Index returns are not Fund returns and do not reflect any management fees or brokerage expenses. Index returns assume that dividends have been reinvested. An index’s performance is not illustrative of the Fund’s performance. Indices are not securities in which investments can be made.

The views and opinions expressed are those of VanEck. Fund manager commentaries are general in nature and should not be construed as investment advice. Opinions are subject to change with market conditions. Any discussion of specific securities mentioned in the commentaries is neither an offer to sell nor a solicitation to buy these securities. Fund holdings will vary.

You can lose money by investing in the Fund. Any investment in the Fund should be part of an overall investment program, not a complete program. The Fund is subject to the risks associated with its investments in Chinese issuers, communication services sectors, direct investments, emerging market securities which tends to be more volatile and less liquid than securities traded in developed countries, foreign currency transactions, foreign securities, other investment companies, Stock Connect, management, market, operational, sectors and small- and medium-capitalization companies risks . The Fund’s investments in foreign securities involve risks related to adverse political and economic developments unique to a country or a region, currency fluctuations or controls, and the possibility of arbitrary action by foreign governments, or political, economic or social instability. Please see the prospectus and summary prospectus for information on these and other risk considerations.

Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider a Fund’s investment objective, risks, charges and expenses carefully before investing. To obtain a prospectus and summary prospectus for VanEck Funds and VanEck Vectors ETFs, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus for VanEck Funds and VanEck Vectors ETFs carefully before investing.

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