A STRUCTURED APPROACH TO DEVELOPING MARKETS

Parametric's Structured, Emerging Markets Strategy is designed to efficiently capture the compelling long-term returns provided by the equity markets of developing countries. Since it began in 1994, this strategy has maintained a consistent investment structure built to fit the unique characteristics of emerging equity markets. Hallmarks of this investment approach include:

Broad diversification - Parametric maintains long-term exposure to a broad list of countries. By doing so, we avoid the risks of active country selection and ensure the strategy benefits unique volatility and correlation aspects of these markets.

Emphasize smaller countries - Parametric's modified equal country weighting process systematically overweights smaller market cap countries relative to the standard emerging ones. There are both risk (concentration of cap-weighted indexes and low correlations of smaller countries) and return (lower valuations and higher growth rates) rationales for this emphasis.

Disciplined rebalancing - A structured approach that involves rebalancing to fixed country weights can turn volatility into an ally in the hunt for superior risk adjusted returns. These markets' unique combination of volatility and correlation creates a compelling case for disciplined rebalancing.