“We’ve seen this movie before. Chinese internet leaders drove close to half the benchmark in 2020 and 2021 before a 60% drawdown. Brazil and Russia carried outsized weight heading into 2014 on the commodity boom. Narrow, thematic rallies tend to end the same way. Today it’s a small group of AI capex beneficiaries, and we’re careful to separate businesses with genuine, demonstrable competitive advantages from those simply riding a temporary supply crunch.
That discipline pushes us toward companies most investors have never heard of, ones that don’t show up in a quick screen and won’t turn up in a quarterly earnings headline. They’re often trading at a discount precisely because capital has been chasing the AI theme instead. We think that’s a durable setup for patient, research-intensive investors, not a short-term dislocation.”
Sean Pompa, Co-Portfolio Manager of the KAR Developing Markets strategy, shared with Financial Advisor Magazine about the case for active management in emerging markets and where a selective approach can make a difference.
The conversation explores:
- Gaps in research coverage across emerging markets and the implications of relying on passive index exposure
- How KAR identifies investment opportunities as AI-driven market leadership narrows the opportunity set
- What differentiates KAR’s approach to active management in developing markets
Read the full interview The Case for Active Management in Emerging Markets for Sean’s perspective.
