Acadian launches Enhanced Emerging Markets Equity Fund

Gillian Savage

Global systematic investment manager, Acadian Asset Management LLC has launched an emerging markets equity fund for Australian wholesale investors, giving financial advisers and their clients access to a diversified portfolio of emerging market companies via Acadian’s disciplined, systematic investment process.

The Acadian Enhanced Emerging Markets Equity – Class A Fund (with CFS as Responsible Entity) seeks to maximise risk-adjusted, long-term returns by investing in a highly diversified portfolio of approximately 500 stocks.

Gillian Savage, Chief Executive Officer, Acadian Australia, said the emerging market opportunity set had broadened significantly over the past decade, due to the expansion of the investable universe, improved data coverage, and reduced trading costs. These developments favoured the group’s systematic style of investing, which relied on quantitative models and algorithms to make investment decisions.

“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.”

Acadian has applied its systematic, active investment process to emerging markets 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 1, 5, 10 and 20-year periods (after fees and based composite performance of peer groups).

Mark Mukundan, Director of Wholesale Markets, Acadian Australia, said the emerging market universe presented a distinctive opportunity set for wholesale investors to access 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, multi-factor 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.”

Acadian had A$189bn in assets under management including $39bn in emerging market strategies, as at 31 December 2024.

The group manages a range of active equity strategies, including global, Australian, and emerging markets, on behalf of some of Australia’s largest superannuation and pension funds and corporations.