The Multi-Manager Emerging Markets Equity Fund returned 5.64% during the quarter, compared with the benchmark return of 6.60%. The Funds overweight exposure to the consumer discretionary sector represented a drag on returns. In addition, stock selection among technology stocks was relatively weak during the period. From a regional perspective, the Fund performed particularly well within the Pacific ex-China region while underperforming in EMEA.
Sub-adviser performance was mixed during the period. Following a strong first quarter, Westwoods positions in the financials, materials and technology sectors underperformed the market. PanAgoras quantitative approach contributed to Fund returns, with particular strength in India.
If you're a long-term investor looking to diversify your investments by pursuing the growth potential of emerging and frontier market equities, then this Fund may be right for you. It is intended for investors who are aware that foreign markets may involve additional risks, such as social and political instability, reduced market liquidity and currency volatility.
Investing in emerging markets entails extra risk. The securities markets of emerging countries are less liquid, more volatility, and less regulated than the markets of more developed countries. This risk is magnified in frontier countries since they generally have smaller economies or less developed capital markets than traditional emerging markets.
- Invest at least 80% of net assets in equity securities of emerging and frontier markets — emerging and frontier markets are defined as markets in MSCI Emerging Markets Index and MSCI Frontier Markets Index.
- Select complementary managers from a broad universe of investment managers.
- Blend managers into a single fund in an effort to provide an attractive combination of risk and return.