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Thursday, November 14, 2013

Ashmore Takes on Investor Xenophobia

Reported by Tommy Fernandez

The condition is called xenophobia, fear of strangers or foreigners. Or perhaps it is xenoglossophobia. That's fear of foreign languages.

Or maybe it's just pantophobia -- which is a fear of everything.

At any rate, there are a fair number of American investors who turn all Woody Allen at the very thought of placing their capital in any emerging markets.

Ted Smith and his colleagues at Ashmore [profile] are doing everything they can to ease investors out of these worries.

Smith, who is head of U.S. intermediary distribution at Ashmore, had this to say on the subject:

One of the main things we do when we educate investors is just dispel some of their misconceptions about the frontier and emerging markets. For example, they think these markets are politically unstable or just about oil and gas. In our presentations and our in-person meetings, we take those misconceptions apart and sort of share with them some of the realities of these markets.

Smith's firm launched earlier this month a new frontier equity fund, expanding the firm's product lineup to eight funds-- all focused on the emerging or frontier markets (five are fixed income and three are equity).

Ashmore, with its team of 15 sales and marketing personnel, is incrementally ratcheting up its educational efforts to promote an appreciation of these investment categories. For example, it recently hired salesman Devang Baxi in September.

"As a starting point,we take it for granted that most investors are under allocated in the emerging markets," he said. "Very often we find that an investor will hold one, maybe two funds, in these markets. We just don;t think that approach will give you access to a vast area of opportunities that exist outside of the developed countries."

Included within these initiatives are three-fold set of webinars hosted for potential clients.

Smith, whose sales colleagues include six people devoted to intermediaries such as private banks, large RIAs, brokerages and subadvisor clients (Ashmore has three such clients), says that Ashmore is typically focused on investors "who are willing to make long-term commitments or strategic commitments."

He said that one of the most important parts of their selling strategy involves simply educating investors on the basics of these markets, either via webinars, white papers or frequent face-to-face visits. Smith and his colleagues will travel a lot to the top family shops and private banks, offering time with their PMs of the funds.

"We have a lot of intellectual capital to offer," Smith said. 

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