GMO Fall Conference | November 01, 2022

Emerging Markets

Turbulent Times, and a New World Order

Geopolitical events and an already strong and rising U.S. dollar have made for a turbulent year in emerging markets.

Risks intensified and impacted valuations across the asset class, with plenty of issues on investors’ minds, including Russia’s invasion of Ukraine, extensive flooding in Pakistan and debt stress caused by similar climate change-related events, and ongoing supply chain disruption from the lingering impacts of the pandemic. And that doesn’t yet mention China, which continues to loom large above all, this year prompting worry of a potential invasion of Taiwan.

GMO has been investing in emerging equity and debt for almost 30 years. At this year’s Fall Conference, our emerging markets experts offered fresh perspectives on the asset class and presented some of the innovative ways we are investing in emerging countries going forward.

Explore our content below and Contact Us or your GMO representative for more information. Intended for accredited investors.


Featured Session:

Reimagining Emerging Markets for a New World Order

Investing in broad emerging markets today involves trusting 50% of your assets to China and Taiwan. Beyond geopolitics, this kind of concentration raises important questions about risk, return, and diversification. Arjun Divecha, who founded GMO Emerging Markets Equity in 1993, has an alternative, innovative solution to this issue within traditional cap-weighted portfolios and benchmarks.

As much art as it is science, Arjun’s “New Normal” approach to determining country weights incorporates multiple dimensions of risk and opportunity, including demographics, predicted growth, macroeconomic risk, climate risk, geopolitical risk, domestic policy risk, and diversification.

With the goal of capturing the true long-term opportunity of emerging markets, the concept of his New Normal is neither index nor active portfolio in the traditional sense. Rather, it represents a new, better way of thinking about investing sensibly in emerging markets.


Ubiquitous China: Latest Views and Impacts of the Aspirant Superpower on EM Debt and Equity Markets

Members of the Systematic Equity and Emerging Country Debt teams discussed the “new” new era of China, its implications for investors, and the country’s path of influence on emerging market debt.


Emerging Markets: Quality, Growth, and Sustainability

Warren Chiang and Binu George introduced the next evolution of GMO’s Emerging Markets Select Equity Strategy, which focuses on finding high-quality companies that can take advantage of important growth trends in emerging markets and utilizes a climate change-oriented approach to ESG and sustainability integrated at the country, sector, and company selection levels.


The (Al)Mighty Dollar – Is It a Problem for Emerging Debt, or an Opportunity?

A consequence of rising rates, the recent strength of the U.S. dollar places stress on emerging countries through both direct and indirect channels. Emerging debt investors Victoria Courmes and Carl Ross unpack the risks and opportunities within emerging debt markets arising from the strength of the U.S. dollar.


ESG Integration in Emerging Debt Markets – The Challenges and the Rewards

The GMO Emerging Country Debt team has integrated ESG factors into both its sovereign and quasi-sovereign/corporate credit research and analysis processes. Members of the team explained how this incorporation has impacted our emerging debt portfolios and results.

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GMO Presenters

Eamon Aghdasi

Eamon Aghdasi

Mr. Aghdasi is a senior analyst engaged in research for GMO’s Emerging Country Debt team. He primarily conducts research in sovereign credits, with a primary emphasis on the Latin American and Caribbean regions and spearheads the team’s sovereign ESG integration efforts. Prior to joining GMO in 2018, he worked at State Street Global Markets as an emerging markets strategist. Previously, he worked at Societe Generale CIB and UBS Investment Bank in similar roles. Mr. Aghdasi earned his bachelor's degree in Economics and International Relations from Tufts University, his MBA from MIT Sloan School of Management, and his MPA/ID from the Harvard Kennedy School.

Warren Chiang

Warren Chiang

Head of Emerging Markets Select Equity; Portfolio Manager, Systematic Equity

Mr. Chiang oversees portfolio management for GMO’s Systematic Equity team and is the head of the Emerging Markets Select Equity team. He is a partner of the firm. Prior to joining GMO in 2015, he worked at Mellon Capital Management as a Managing Director of Active Equity Strategies. Previously, he worked at the Federal Reserve Bank of San Francisco as a research associate. Mr. Chiang earned his bachelor's degree in Economics and his MBA from the University of California Berkeley. He is a CFA charterholder.

Victoria Courmes

Victoria Courmes

Portfolio Manager

Ms. Courmes is engaged in portfolio management and research for GMO’s Emerging Country Debt team. She is primarily responsible for the team’s local currency debt portfolio and is also the team’s lead liaising with the Developed Rates & FX team’s quantitative researchers on currency and interest-rate strategies. Prior to joining GMO full-time in 2016, she worked at Acadian Asset Management as an Associate Portfolio Manager in Emerging Markets Local Bond Funds. Previously, she worked at Lord Abbett as an International Economist and Currency/ Local Rates Strategist. Ms. Courmes earned her bachelor's degree in Political Science from Barry University and her MA in International Relations from the School of Advanced International Studies at John Hopkins University.

Arjun Divecha

Arjun Divecha

Founder of GMO Emerging Markets Equity

Mr. Divecha is a portfolio manager for GMO’s Emerging Market strategies and the founder of GMO’s Emerging Markets Equity team. He is also a member of the GMO Board of Directors and a partner of the firm. Prior to joining GMO in 1993, he spent 12 years at BARRA directing software development, marketing, client service, and emerging markets research and development. Mr. Divecha holds a Bachelor of Technology in Aeronautical Engineering from the Indian Institute of Technology, Bombay and an MBA in Finance from Cornell University. 

George_Binu

Binu George

Mr. George is a portfolio strategist for GMO’s Systematic Equity and Emerging Markets Select Equity teams. Prior to joining GMO in 2009, he was a portfolio manager with AXA Rosenberg. Previously, Mr. George worked in several roles encompassing research and investment strategy at Barclays Global Investors. Mr. George earned his BTech in Civil Engineering from Indian Institute of Technology, Madras and his MBA in Finance from the University of Rochester. He is a CFA charterholder.

Ross_Carl

Carl Ross

Emerging Country Debt

Dr. Ross is engaged in research for GMO’s Emerging Country Debt team and a partner of the firm. He leads the team’s research in fundamental sovereign credit, with a primary emphasis on Asia, Emerging Europe, Middle East, and Africa. Prior to joining GMO in 2014, he was a managing director at Oppenheimer & Co. Inc. where he covered emerging debt markets. Previously, he was the Senior Managing Director and Head of Emerging Markets Fixed Income Research at Bear Stearns & Co. Dr. Ross earned his bachelor's degree in Economics from Mount Allison University, as well as his MA and PhD in Economics from Georgetown University.

Sobolev_Sergey

Sergey Sobolev

Mr. Sobolev is a senior analyst engaged in research for GMO’s Emerging Country Debt team. He conducts research on complex financing structures and corporate credits, with a primary responsibility for state-owned enterprises (“quasi sovereigns”) in Latin America and China. Prior to joining GMO in 2018, he worked at ING Financial Markets as a vice president in debt capital markets. Mr. Sobolev earned his BS in Economics from University College London and his MS in Management from Imperial College London. He is a CFA charterholder.

Ulukan_Mustafa

Mustafa Ulukan

Mr. Ulukan is a senior analyst engaged in research for GMO’s Emerging Country Debt team. He conducts research on complex financing structures and corporate credits, with a primary focus on state-owned enterprises (“quasi sovereigns”) in Asia, Emerging Europe, Middle East, and Africa.  He is also the team’s expert on banks and financial firms. Prior to joining GMO in 2015, he was an associate for East Asian Financials at The World Bank Group, where he participated in Financial Sector Assessment Programs jointly with the IMF. Previously, he was a Private Equity Analyst at Grea Ventures. Mr. Ulukan earned his bachelor's degree in Economics from the University of California, Irvine and his MBA from the George Washington University School of Business. He is a CFA charterholder.

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