Emerging Markets Equity Strategy

Q4 2019 | December 31, 2019

Annualized Returns (%) 

  QTD YTD 1 Year 3 Years 5 Years Since Inception1
Gross of fees 11.07 21.36 21.36 9.65 3.20 6.78
Net of fees 10.80 20.17 20.17 8.57 2.18 5.72
Benchmark2 11.84 18.42 18.42 11.57 5.61 6.21
1 Inception Date: July 1, 2009 2 Benchmark: MSCI Emerging Markets Net

Characteristics

  Portfolio Weight
Excess return (gross since inception) 0.57
Excess return (net since inception) -0.49
Tracking error 4.16
Standard deviation (annualized) 16.97
Information ratio (gross since inception) 0.14
Information ratio (net since inception) -0.12
Upside capture (3 yr) 89.26%
Downside capture (3 yr) 98.67%
Weighted average market cap $77,279mm
Weighted average market cap (Benchmark) $114,198mm

Sector Weights (%)

  Portfolio Weight Benchmark Weight 
Communication Services 6.30 11.03
Consumer Discretionary 20.31 14.18
Consumer Staples 8.68 6.30
Energy 6.30 7.39
Financials 26.02 24.24
Health Care 4.38 2.84
Industrials 5.18 5.29
Information Technology 12.79 15.69
Materials 4.30 7.40
Real Estate 4.09 3.01
Utilities 1.66 2.63

Top Ten Holdings (%)

Portfolio Weight
Ping An Insurance (Group) Company of China, Ltd. Class H 3.77
HDFC Bank Limited 3.45
Alibaba Group Holding Ltd. 2.81
Tencent Holdings Ltd. 2.43
Samsung Electronics Co., Ltd. 1.85
Meituan Dianping Class B 1.76
Vanguard FTSE Emerging Markets ETF 1.63
iShares Core MSCI Emerging Markets ETF 1.62
SPDR Portfolio Emerging Markets ETF 1.62
Schwab Emerging Markets Equity ETF 1.61

Region Weights (%)

Portfolio Weight
Pacific Rim 56.79
LatAm 15.98
South Asia 12.65
Europe EM 8.61
Africa 3.25
Cash 1.29
Middle East 0.79
Europe Core 0.58
Central Asia 0.06

Portfolio Management

Tina Byles Williams

Chief Investment Officer & Lead Portfolio Manager

Thomas Quinn, CFA

Managing Director, Sr. Portfolio Manager, Tactical & Multi-Manager Strategies

About Xponance

Xponance is a multistrategy investment firm offering strategies across equity and fixed income. We are independent and employee owned by women and diverse professionals, whose common passion is to do the right thing for our clients and each other. Xponance is the successor firm representing the integration of two great legacy firms, FIS Group, Inc. and Piedmont Investment Advisors, LLC

Investment Philosophy

We believe that a carefully constructed portfolio of small, entrepreneurial managers can outperform its benchmark and large AUM peers on a risk adjusted basis over a full market cycle, without taking on uncompensated levels of active risk. This strategy is defined by exposure to undiscovered, high conviction Non-U.S. equity managers, who we
are delivering to clients in customizable solutions.

Portfolio Facts

Inception date 07/1/2009
Assets in strategy $748mm
Woman or diverse owned managers 40-60%
Target active share >70
Benchmark MSCI Emerging Markets Net
Min. investment $25mm
Vehicle(s) available Separately managed
The information provided on this page should be considered supplemental. For complete performance data, please see the Xponance Emerging Markets Equity Strategy disclosures below.

Annualized Disclosure Presentation

Composite Assets Annualized Performance Results (%) 3 Year Ex-Post Standard Deviation (%)
Year End Total Firm Assets ($mm) USD ($mm) Number of Accounts Composite Gross Composite Net Benchmark1 Composite Dispersion Composite Net Benchmark1
2019 4,621 748 9 21.36 20.17 18.42 2.55 13.78 14.17
2018 4,868 721 12 -16.37 -17.21 -14.57 0.63 13.68 14.60
2017 5,103 434 11 29.89 28.63 37.28 2.52 13.24 15.35
2016 4,695 256 11 1.10 0.09 11.19 1.93 13.47 16.07
2015 4,475 123 8 -12.16 -13.04 -14.92 2.40 12.07 14.06
2014 4,527 182 8 2.27 1.26 -2.19 N/A 13.53 15.00
2013 4,368 172 6 -1.34 -2.32 -2.60 N/A 19.11 19.04
2012 2,710 79 5 or Fewer 18.23 17.06 18.22 N/A 22.51 21.50
2011 2,351 62 5 or Fewer -15.33 -16.18 -18.42 N/A N/A2 N/A2
2010 2,309 53 5 or Fewer 22.97 21.77 18.87 N/A N/A2 N/A2
1 Benchmark: MSCI Emerging Markets Net 2 Not shown because 36 monthly returns are not available

Xponance, Inc. (“Xponance”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Xponance has been independently verified for the periods from November 1, 1998 through December 31, 2019. A copy of the verification reports are available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

On August 31, 2018, FIS Group, Inc. (“FIS Group”) acquired Piedmont Investment Advisors, Inc.’s (“PIA”) predecessor, Piedmont Investment Advisors, LLC. Xponance is the successor registrant under the Investment Advisers Act of 1940 (the “Advisers Act”) to both FIS Group and its wholly-owned subsidiary, PIA. Pursuant to a corporate rebranding and consolidation strategy, Xponance was established effective April 1, 2020, to leverage the long histories of its predecessor entities in providing customized investment management products to institutional clients. FIS Group (through its former subsidiaries, Fiduciary Investment Solutions, Inc. and FIS Funds Management, Inc.) managed assets since 1996 and PIA (through its former affiliate Piedmont Investment Advisors, LLC) began managing assets in 2000. The firm maintains a complete list of composite descriptions, which is available upon request.

Total firm asset presented through, and including, Calendar Year 2019 represent total firm asset for FIS Group as, prior to April 1, 2020, this composite was managed by legacy firm FIS Group. Total firm assets presented post April 1, 2020 represent the total firm assets of Xponance.

Xponance Emerging Markets Equity Strategy is an emerging markets equity composite which contains fully discretionary emerging markets equity account(s) that are constructed by using the manager of managers concept and, beginning February 1, 2018, may or may not have applied a tactical completion account to implement Xponance’s top down views, including the ability to amplify or reduce overall market beta risk, based on our risk indicators, more nimbly and more efficiently. Accounts that are no longer with the firm are included through the last full measurement period such accounts were managed in the composite’s style. For comparison purposes this composite is measured against the MSCI Emerging Markets net Index. Since the performance inception of the composite, sub-advisor(s) have been utilized to manage assets within the Xponance Emerging Markets Equity Strategy. For periods prior to January 1, 2010, cash was managed separately for all carve-outs. For calendar year 2010, the composite was made up of 100% carve-outs. The Xponance Emerging Markets Equity Strategy composite was created November 6, 2013. The composite name changed from “FIS Group Emerging Markets Equity Strategy” to “Xponance Emerging Markets Equity Strategy” on April 1, 2020.

Past performance is not indicative of future results. The US Dollar is the currency used to express performance. Returns include the effect of foreign currency exchange rates. Sources of foreign exchange rates may be different among the portfolios within a composite, and between the composite and the benchmark. Composite performance is presented net of foreign withholding taxes on dividends, interest income, and capital gains. The actual tax rate applied may vary by custodian and the investor’s domicile. MSCI uses the maximum withholding tax rate applicable to institutional investors in calculating MSCI net dividends.

Gross of fee performance results are presented gross of management fees and include the reinvestment of all income. Net of fee performance results reflect an annual management fee of 1.00%, applied monthly. Actual management fees incurred by clients may vary. Xponance uses the following asset-based standard fee schedule: 1.00% for the first $10 million, 0.90% for the next $15 million, 0.85% for the next $25 million, 0.80% for the next $25 million, 0.70% for the next $25 million, negotiable thereafter. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.