Our Emerging Markets strategy is designed to provide all-cap exposure to countries with the potential to outperform the index with less volatility. Our investment process is based on mathematical principles of diversification, compounded growth, and volatility capture.
Strategy goals
Parametric’s Systematic Alpha strategies are broadly diversified and dynamically rebalanced portfolios designed to outperform capitalization-weighted approaches over the long term with less risk. Diversification is established via a system of portfolio target weights. As market forces move the portfolios’ holdings away from the target weights, diversification is re-established via a trigger-based rebalancing process. Our active reweighting and rebalancing have the potential to generate excess returns. Parametric’s experience constructing and managing portfolios for over 25 years has informed and enhanced the development of our Systematic Alpha strategies.
The Parametric Emerging Markets strategy is an all-cap equity strategy that includes large, mid- and, small-cap stocks in over 50 developing countries. A unique feature of our strategy is that it invests across both emerging and frontier markets. The strategy utilizes a top-down, three-part process designed to actively eliminate country and sector concentrations, and applies a disciplined, unemotional trading approach to build and maintain the strategy’s investment exposures.
Investment philosophy
We utilize an engineered and disciplined approach to exploit the unique characteristics of the emerging markets equity asset class.
Country Selection
- Broad country universe
- Countries are equally-weighted within each of the model tiers
Rebalancing
- A systematic rebalancing trigger brings countries back to target weights
- Determined by country-specific transaction costs
Sector and Stock Allocation
- Robust investment process maintains exposure to major economic sectors
- Highly-diversified equity holdings throughout the global marketplace
The investment strategy described herein is designed to be implemented in a separately managed account (SMA) maintained by a qualified custodian. Investors should contact their financial advisor to establish an SMA. Parametric currently serves as a sub-adviser to investment products offered and distributed by its affiliate, Eaton Vance Distributors, Inc., a registered broker-dealer. Parametric sub-advises a fund with a strategy similar to the one presented herein. Learn more*
*We provide a link to the Eaton Vance website for your convenience only. It is for informational purposes only and is not an offer to buy or sell any security. Although Parametric is an affiliate of Eaton Vance, Parametric does not administer the website or control any of its content. Accordingly, this link is provided as is, without representation or warranty, express or implied, as to the accuracy of such content or its completeness or timeliness, all of which (including, without limitation, any implied warranties of merchantability or fitness for a particular purpose) Parametric expressly disclaims. This link’s appearance on Parametric’s website should not imply our endorsement of the linked site or its content. Parametric is not responsible for your use of the linked site, its content, or any other resources (including, without limitation, other linked sites and their contents) accessible through it. If you choose to leave this website and visit the linked site, you will be subject to its terms of use and privacy policies. By continuing to the linked site, you acknowledge and agree to the foregoing.
Global market investing (including developed, emerging, and frontier markets) carries additional risks and/or costs, including, but not limited to, political, economic, financial market, currency exchange, liquidity, accounting, and trading capability risks. Future investments may be made under different economic conditions, in different securities, and using different investment strategies. Deviations from the benchmarks provided herein may include, but are not limited to, factors such as the purchase of higher-risk securities, over- or underweighting specific sectors and countries, limitations in market capitalization, company revenue sources, and/or client restrictions. Parametric’s proprietary investment process considers factors such as additional guidelines, restrictions, weightings, allocations, market conditions, and other investment characteristics. Thus returns may at times materially differ from the stated benchmark and/or other disciplines provided for comparison.
For additional information please visit the Disclosure page.
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