Eurizon Capital has followed up its launch of the YAS Robotics Active UCITS ETF with a high conviction fund seeking the best large-cap emerging markets equities in the world.

The CO Eurizon SLJ EM Equity Magnificent 30 UCITS ETF listed in London and Dublin this month.

Managed by Stephen Jen and Fatih Yilmaz, the founders of Eurizon’s SLJ Capital business in London, the ETF will focus on a portfolio of 20-30 stocks with strong balance sheets, resilient business models and long-term growth potential. Its sterling share class ticker is M30G.

“Emerging markets do not lack exceptional companies. The challenge is that broad indices combine them with a far more uneven opportunity set. Our view is that success in EM equities depends on identifying the countries and companies where structural strengths are not obscured by the wider index,” said chief executive Jen.

The unhedged portfolio bears a total expense ratio of 0.8%.

Jen and co-chief investment officer Yilmaz have worked together for over 20 years and founded SLJ Macro Partners in 2011. Eurizon Capital, the asset management arm of Italian bank Intesa Sanpaolo, bought a majority stake in 2016.

Our view

David Batchelor, senior analyst at QuotedData, said: “Eurizon is betting that emerging markets are ripe for the same high-conviction active ETF treatment that has already gained traction in developed equities. There is something to that argument, as broad EM indices often leave investors with significant exposure to lower-quality or less predictable parts of the market, so a concentrated portfolio of large-cap names with stronger balance sheets and clearer growth prospects may prove more compelling than passive exposure. In that sense, the fund is not just another active ETF launch, but a statement that emerging markets may be one of the areas where active selection has the strongest case”.

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