Many emerging markets are suffering from decelerating growth, causing some investors to make decisions based on short-term concerns. Justin Leverenz, Portfolio Manager of the Developing Markets Fund, points out that EM funds with the strongest long-term performance often lag in these environments. In spite of this, he is staying true to his well-defined investment approach: choosing high-quality companies at appropriate prices. He tends to hold investments for five years or longer, which is often when companies realize their full potential.
Leverenz notes that many EM companies have become multinationals by using profits and cash flows from strong existing markets to fund acquisitions outside their home base. Others have become multinationals by serving foreign markets.
Leverenz also believes that a strong savings culture and limited investment options will support continued growth in the Chinese stock market and will inevitably drive economic reforms. He doubts frontier markets will have the same success as the emerging markets. In any case, the size of his fund limits him from investments in smaller companies in both emerging and frontier markets.
These views represent the opinions of OppenheimerFunds and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the date of this presentation and are subject to change based on subsequent developments.
Foreign investments may be volatile and involve additional expenses and special risks, including currency fluctuations, foreign taxes, regulatory and geopolitical risks. Emerging and developing market investments may be especially volatile. These risks are magnified in frontier markets. Investing significantly in a particular region, industry, sector or issuer may increase volatility and risk.