Look for Calvert Investments in emerging markets investing, with the launch today of its latest socially responsible investment and first emerging markets fund.
The Calvert Emerging Equity Fund, the third of the Bethesda, Md.-based firm's Solution Strategies portfolios, seeks long-term capital appreciation by investing in equity securities of companies located in emerging markets, using the fund's sustainability and corporate responsibility criteria. It is subadvised by Hermes Investment Management Limited.
The fund targets market capitalization size characteristics similar to that of the MSCI Emerging Markets Index, although it may invest in companies of any size. Bennett Freeman, senior vice president of sustainability research and policy, said that adding this offering fulfills Calvert's desire to add an emerging markets fund for some time, especially so as to motivate improved performance and data on environment and social governance from companies in emerging economies.
"We now feel that there's a critical mass of companies based in and/or operating in emerging markets and even some of the so-called frontier markets that really are making significant contributions to sustainability that we want to acknowledge and further encourage," Freeman said.
Natalie Trunow, senior vice president and chief investment officer for equities, added that through this fund, investors may be able to capitalize on misallocations and mispricings resulting from underperformance from developed markets relative to expectations.
"The investment community assumed that while most developed economies will reel from the economic crisis, emerging markets would be able to be insulated from those developments. But emerging markets were affected by countries like Japan, and their growth rates and profitability matrices have been impacted significantly," Trunow explained.
"This environment has created mispricing and interesting investing opportunities within emerging markets. Going in after the shock of the financial crisis we believe will allow us as investors an opportunity to find attractive entry points in some of the securities and countries that may not have been there a few years ago."
"With the SRI approach, we do believe that we can provide a unique offering to investors who are interested in SRI-type products because there is simply not much out there in the way of SRI market offerings," she added.