Can you give a brief overview of your strategy in terms of what you are trying to achieve for investors, your investment process and the make-up of the investment team?
Our belief is that investing in emerging markets companies with strong secular growth can lead to significant alpha generation over time. Our strategy takes a concentrated and unconstrained approach by investing in emerging markets companies poised to capitalise on innovative secular growth trends, which we believe is the optimal approach. A key differentiator versus peers is our agnostic view relative to the MSCI EM index, which is heavily weighted to the cyclical segments of the market.Our strategy is managed by three portfolio managers: Albert Kwok, Sara Moreno, and Mark Baribeau. Mark Baribeau has overall responsibility for Jennison's Global, International and Emerging Markets equity strategies. Albert focuses on stocks in Emerging Asia. He grew up in Hong Kong and Singapore and is fluent in Mandarin and Cantonese. Sara focuses on stocks in Latin America, Emerging Eastern Europe, the Middle East, Africa and emerging marker healthcare companies. She grew up in Ecuador, Nigeria, and Trinidad and Tobago. She is fluent in Spanish, and proficient in French and Italian. The team also leverages the insights and experience of Jennison's other research analysts, many of whom are sector specialists and work on the firm's other equity strategies.
How have you been trying to weather the storm caused by the Covid-19 pandemic and what could be the longer-term implications for your strategy?
Our portfolio was well-positioned prior to the outbreak of Covid-19, as the pandemic solidified the importance of specific secular themes that were already a large part of our portfolio. Many of the winners of the last few years offer differentiated and disruptive business models that became more compelling during the economic turmoil and social distancing brought on by the pandemic. Grocery delivery, ecommerce, cloud computing, online video, and gaming were among the themes that accelerated and remain positioned for continued growth. The pandemic led to change in consumer and corporate behavior. There has been increasing internet adoption by lower tier cities and also by older demographics. Going forward, we believe many of these changes will be structural, not temporary as companies and individuals in developing countries gain an enhanced appreciation of their distinct value and utility especially in times of unprecedented disruption and restricted mobility.
Can you identify a couple of key investment opportunities for your fund you are playing at the moment in the portfolio?
In general we find companies creating a disruptive technology or service, introducing a new product to the market, or expanding into underpenetrated markets with their existing line-up of products or services as especially attractive. The majority of these opportunities are found in the traditional growth sectors of the economy -- healthcare, consumer technology, and communication services.
The acceleration in e-commerce penetration was one of the biggest global trends of 2020 that we believe will continue to for years to come. But for 2021 and beyond, it'll be critical to distinguish where demand was pulled forward versus where demand will manifest next. Emerging markets, like Latin America and Southeast Asia, will most likely see the biggest explosion in growth rates, due to low penetration rates coupled with very large middle class populations. E-commerce facilitators, like digital payment platforms with offline payment capabilities, are also beneficiaries of the growth in ecommerce, as these regions tend to be much less reliant on credit cards.
Additionally, the Chinese healthcare sector offers compelling growth opportunities with strong long-term catalysts, especially in the pharmaceutical and biotech arenas. As the world's most populous nation with the second-largest economy, China offers long-term growth opportunities in its healthcare sector, driven by several dynamic trends: an aging population, an increasing prevalence of chronic diseases, growing wealth to afford medical care, regulatory reform, and an influx of capital.
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Want to learn more about the NEXT Economy? Explore 6 innovative accelerating themes driving strong durable growth at pgimfunds.com/nexteconomy
Past performance is no guarantee of future results. Source: Morningstar as of 28 February 2021. Morningstar utilises extended performance returns, which links pre-inception returns to a U.S. 40-act mutual fund managed using the same investment approach, with a longer track record, which begins 16 September 2014. The inception date for the PGIM Jennison Emerging Markets Equity Fund, USD I Acc is 30 November 2016. Fees were adjusted in line with the UCITS Fund's current expenses for the USD I Acc class. The extended performance included in this document is for the purpose of illustrating long-term performance returns. Performance by share class may vary. Ranking represents the fund's standing across all Europe, Asia, and Africa (EAA) funds in the Global Emerging Markets Equity category, 1%=highest; 100=lowest. Morningstar rankings measure total return and do not include the effect of sales charges.
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