3 Themes in Emerging Markets

Identifying Drivers is Important Step in Pinpointing Undervalued Companies

On the Horizon: Preparing for a Weaker Dollar Era

Image by Thomas Breher from Pixabay 

By ROBERT M. DALY/Glenmede

Profound shifts in the macro economic, competitive and political environment are converging to create a potentially long-lasting period of weakness for the world’s reserve currency. While many analysts and investors have been debating the potential for a short-term crash of the U.S. dollar (USD), in our view investors should be considering how to prepare for the possibility of a long-term period of dollar weakness.

Recent Depreciation Highlights that Issues are Likely to Linger

After bouncing back from an early March low caused by COVID-19 concerns, the U.S. Dollar Index (DXY) has resumed its slide, dipping approximately ten percent from its mid-March peak and moving toward two-year lows. An analysis of the drivers for this decline shows a multitude of reasons for this trend, including macro conditions, monetary and fiscal policy, trading fundamentals and a structural shift in how the dollar works within the global investment framework. When examining the major U.S. dollar pairs[1], we see four key issues behind the shift in the dollar’s valuation:

Source: Bloomberg. Click chart to enlarge.

1. The 2008 Dollar Shortage no Longer Exists

A myriad of issues makes it hard to argue that the U.S. dollar shortage continues to be an issue, as detailed in a recent GaveKal research report (GaveKal Research: “The US Dollar Starts to Break Down” July 22, 2020). In 2008, the U.S. dollar was the world’s overarching currency, and the United States was one of the only major economies with positive interest rates. During that time, the U.S. current account deficit was between 4-6 percent of gross domestic product. Plus, foreign-domiciled U.S. dollar debt was a legitimate concern during the great recession. In contrast, today interest rates are hovering near the zero lower bound, the current account deficit is widening, and U.S. money supply (M2) is growing at 24.5 percent per year. Additionally, the U.S. Federal Reserve has also opened up swap lines with 14 other central banks. GaveKal Research: “The US Dollar Starts to Break Down” July 22, 2020).

Source: Bloomberg, Bank of Canada, Bank of England and European Central Bank. Click chart to enlarge. 

2. Competition Across the Globe 

A credible alternative to the U.S. dollar may be emerging as the European Union appears to be regaining strength, making it attractive to investors again. In a demonstration of solidarity that Alexander Hamilton would envy, EU members’ decision to jointly issue up to 750 billion euros for the EU’s historic stimulus plan signals reassuring unity for the euro. However, the real question will be whether the European experiment provides a lasting stable fiscal foundation. Overall, we believe the EU developments can change how reserve managers and asset allocators think about their options around the world.

Source: Bloomberg. Click chart to enlarge.

3. Interest Rate Divergence Between China and the United States

China is not monetizing the COVID-19 crisis, while the United States pursues a policy of debt monetization. This difference in monetary policy has the potential to create a stark divergence in long-term interest rates between the countries.

4. The Unpredictable U.S. Political Backdrop

A chaotic U.S. political environment is making a very uncertain construct for the dollar. A divided government, a seeming inability to effectively address the COVID-19 pandemic, tax implications from the stimulus packages, election-year political dynamics and heightened Sino-U.S. tensions are just some of the concerns complicating monetary policy.

In short, we are now in a period of ample liquidity provisioned by the major world’s central banks combined with an uncertain U.S. domestic situation. The investment environment has changed markedly and in ways that are likely to continue for quite some time. 

Broader Implications for Investors

Given these significant and potentially long-term shifts, investors have a number of potential considerations as they map their asset allocation and investing strategies:

1. Inflation Dynamics

The decline in real interest rates against nominal rates completely bounded by the U.S. Federal Reserve has caused U.S. breakevens to rise significantly. While this would suggest a deflationary environment, there is real concern that persistent debt build up coupled with a depreciation in the dollar could create a higher likelihood of inflation as we move into 2021. According to Goldman Sachs (Gold Views: In search of a new reserve currency), the United States’ expanded balance sheet and vast money creation could heighten fears about the value of the dollar. The outcome likely would then be higher inflation but at a surmountable level. We are do not currently projecting anything similar to a 1970s scenario.

2. Gold and Metals

Gold can be a very good hedge in portfolios specifically against inflation. We believe that with real interest rates at all-time lows, an appropriate allocation to gold, as well as other metals such as silver, could make sense for investors.

3. Emerging Markets

A weaker dollar is good for external global growth. We believe that the current dollar dynamic may be a predictor of better returns in emerging markets.

Thinking More Broadly for the Longer Term

The current dynamics may lead to a very different investment environment than we have seen recently. Monetary trends today are supportive to treasury inflation-protected securities, metals such as gold and silver, and emerging markets. Going forward, investors may need to consider a more global construct, looking well beyond the U.S. domestic focus that has dominated the past decade.

While we think about the dollar’s decline and the inflationary scenario that the market is worried about, we don’t perceive these as fundamentally problematic at this time. Real interest rates are the narrative. The driver pushing risk assets is the continued low interest real rate environment. As real interest rates continue to drop, and the dollar declines, risk assets persist as attractive opportunities.

Source: Bloomberg. Click chart to enlarge.

Glenmede Investment Management, LP, is an Associate Member of TEXPERS.The views expressed in this article are those of the author and not necessarily Glenmede Investment Management nor TEXPERS.

Sources:

[1] The major pairs are the four most heavily traded currency pairs in the forex market. The four major pairs are the EUR/USD, USD/JPY, GBP/USD, USD/CHF.

About the Author: 

Robert Daly is Director of Fixed Income for The Glenmede Trust Company, N.A. and Glenmede Investment Management LP. He is responsible for the management of over $4 billion of tax-exempt and taxable fixed income strategies for institutions, consultants and private clients. Daly works closely with a team of traders, portfolio managers, credit analysts and other professionals to broaden exposure to GIM’s fixed income suite. He also serves as a member of GTC’s Investment Policy Committee. 

Prior to joining Glenmede, Daly served as a Senior Portfolio Manager for U.S. and global fixed income strategies at BlackRock in New York. In this role, he was instrumental in establishing and managing a team responsible for asset allocation development, portfolio construction, risk budgeting and formulating investment process. Previously, Daly managed multi- sector and investment grade credit fixed income portfolios for institutional clients. 

Daly earned a Master of Business Administration degree in finance and accounting from Columbia University and his Bachelor of Arts degree in government from Dartmouth College.

BY NICK YEO, Aberdeen Standard Investments

It’s an odd time to talk up Chinese stocks. China is locked in a bitter trade war with the U.S. and it was the world’s worst-performing major market last year.

It's an inefficient market 

Retail mom-and-pop investors account for 80% of trading turnover on the country’s stock exchanges, which, until recently, were closed to overseas investment. They tend to be swayed by breaking news rather than cool-headed analysis of company prospects. The result is a volatile, sentiment-driven market.

But this creates opportunities for investors to pick up good companies trading below fair value. Sentiment can change quickly. Two drivers that could inspire a turnaround are a U.S.-China trade deal and China’s inclusion in global indices.

A prolonged trade conflict would hurt corporate profitability. Tariffs dent the earnings of companies that benefit from global supply chains, many of which are listed on U.S. exchanges. This may have been a factor behind last December’s S&P 500 Index slump.

It’s in the interest of both sides to resolve this dispute. The catalyst could be another market rout. President Trump is already risking backlash from rural Republicans impacted by Chinese duties.

While we expect talks to continue, we’re confident a deal will be struck — especially with a U.S. presidential election on the horizon. Any deal would likely be received positively by markets, giving companies greater clarity on their revenue prospects and spending plans.

At the same time, global index provider MSCI is doubling the number of Chinese stocks — or A-shares — in its emerging-markets index. Within five years, it’s estimated they could account for 20%. This would draw in capital from foreign institutions that track the index passively.

This is long-term money, stickier than today’s sentiment-driven flows. It will expose Chinese company managements to global standards of accountability and best practice.

Improving governance tends to enhance corporate performance and helps to realize value for shareholders. We believe it’s better for investors to get ahead of this curve.

Back to the future

So why invest in China? The answer is growth. Despite frequent bulletins on China’s slowing GDP growth, it is still above 6% a year — faster than advanced economies.

At the start of this year, consensus 2019 earnings forecasts for A-share stood at 15%. Investors will struggle to find many markets offering double-digit growth.

Perspective is important. China and India used to account for half of global GDP growth, before the industrial revolution gripped the U.S. and Western Europe in the 18th century and reduced both to a statistical irrelevance.

It was only in 1978 that Communist Party reformists set in motion a process of industrialization and urbanization on an unprecedented scale. China is now the world’s second-largest economy in nominal terms.

Within 30 years, China and India are again forecasted to account for 50% of global GDP growth. It points to the mother of all mean reversions.

Today 60% of China’s population lives in urban areas — and this figure is rising. People gravitate toward cities to find better jobs, health care and education services. It means they get wealthier, too. In 1960, China’s GDP per capita was $100. Today it’s $7,500, and in Shanghai it’s $20,000.

Some 39% of the population is classified as middle class now — from 2% in 1999. That’s half a billion consumers. Life expectancy has also more than doubled since 1960, to 76 years.

Rising wealth and living standards mean China is moving to higher-value goods and services. Investors can buy into listed companies poised to benefit from this structural growth. We have found quality stocks in areas including travel, food and beverages, luxury goods and Chinese medicine.

China’s exchanges also have low correlation to global markets. Chinese policymakers are steering the economy away from manufacturing and exports to reliance on domestic consumption and services. The latter make up more than half of China’s GDP growth today.

Domestically focused firms are less tied to global-economic and interest-rate cycles. They are also more insulated from the worst effects of the trade war. In this way, A-shares can bring valuable diversification benefits to a portfolio.

So investors prepared to look beyond today’s trade war and focus on the long-term opportunity will be well placed to ride on China’s future consumption growth.

Important information

Foreign securities are more volatile, harder to price and less liquid than U.S. securities. They are subject to different accounting and regulatory standards, and political and economic risks. These risks are enhanced in emerging markets countries. Diversification does not ensure a profit or protect against a loss in a declining market.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of Aberdeen Standard Investments or TEXPERS.

About the Author
Nicholas Yeo is the director and head of the China/Hong Kong Equities team at Aberdeen Standard Investments. Yeo holds a bachelor's degree in Accounting and Finance from The University of Manchester and a master's degree in Financial Mathematics from Warwick Business School. He is a CFA charterholder.

BY NIKOLAJ SCHMIDT, T. Rowe Price

Volatility returned to markets in mid‑May after trade talks between the U.S. and China appeared to stall. If the current dispute between the two biggest contributors to global gross domestic product becomes a full‑scale trade war, it will adversely impact not just the U.S. and China, but the entire world economy. Trade wars do not produce any winners in the long term.

Tariffs directly affect economies in two main ways: first, because they function as simple taxes on goods and, second, because they cause uncertainty, which impacts household and corporate decision‑making. Let’s look at each of these in turn.

Tariffs as Taxes

Although taxes on goods increase the tax revenues of governments, they also lead to a misallocation of resources, which drives the overall economy into an inefficient equilibrium. In economics jargon, this is known as the “deadweight loss” of taxation. Because tariffs raise the price of consumption, the purchasing power of households is reduced and fewer goods are bought. At the same time, households and companies try to substitute away from the tariffed goods, thereby ending up consuming a basket of goods that has been distorted by the tax. This new basket of goods represents an inferior choice to the consumer.

When President Donald Trump tweets that the U.S. will win the tariff war, he assumes that U.S. households and companies will substitute toward a domestically produced basket of goods and that this will indirectly create new American jobs. I’m skeptical. 

Although taxes on goods increase tax revenues, they also lead to a misallocation of resources.

In my view, it is more likely that U.S. households and companies will shift their consumption to goods produced in Vietnam or Mexico rather than back to American‑produced goods and that U.S. jobs which have been outsourced to China will not be repatriated before the production process has become entirely automated. American‑produced goods would be a viable alternative if either the U.S. was the most cost‑efficient producer after China (which it is not) or if the U.S. harbored the production facilities required to produce electronic gizmos it currently imports from China. In an unsettled trade regime, U.S. companies are unlikely to build onshore production facilities to cater to this potential demand.

Tariff Uncertainty

The second way that tariffs reduce consumption is by creating uncertainty, which causes households to postpone consumption and companies to defer capital expenditures. The impact of uncertainty on an economy is akin to monetary tightening (which is clearly not part of President Trump’s agenda). As the U.S. and China are the two biggest economies in the world, any uncertainty created by a prolonged trade war between the two will affect the global economy. The few countries that might benefit are those, such as Vietnam and Mexico, that can deliver substitutes for tariffed Chinese goods in a cost‑efficient manner.

The impact of uncertainty on an economy is akin to monetary tightening.

Trade wars do not just hit consumption, they also impact inflation, central bank policies, and exchange rates. As tariffs function largely like consumption tax hikes they are likely to cause headline inflation to rise initially, but just like any other form of fiscal tightening, they will eventually cause growth to slow. This will lead to an increase in output gaps, which reduce core inflationary pressures. As U.S. households and consumers substitute away from goods produced in China, China is likely to respond by trying to export its excess capacity to the rest of the non‑U.S. world. This is how the disinflationary shock of tariffs is transmitted across the globe.

The impact of tariffs on central bank policies will differ by region. For a developed economy central bank, the monetary policy implications of tariffs are straightforward: Tariffs lead to slower growth and lower core inflation pressures, so the appropriate monetary policy response is dovish. In emerging markets, however, rising uncertainty is more likely to trigger capital outflows, putting downward pressure on growth and upward pressure on inflation. To keep capital onshore, emerging market central banks may be forced to respond with monetary tightening.

How tariffs affect exchange rates is a complex function of demand elasticities. Usually, the country whose output gap is most adversely affected by tariffs is likely to see its currency depreciate the most. In the current environment, this would mean that emerging market currencies would depreciate versus the U.S. dollar and the U.S. dollar would lose ground against other major currencies.

Given the negative overall impacts of tariffs, it is tempting to conclude that sanity will prevail and that the U.S. and China will step back from the brink and walk away from a situation that will only serve to harm the economies of both countries. However, President Trump seeks to be reelected next year and may decide that the political gains from an outright fight with China outweigh the political cost of slower economic growth. Indeed, support for populist parties across the world continues to grow on the back of rising inequality and concerns about the impact of globalization. Tariffs may not be a good idea economically, but it is politics, not economics, that wins elections. Consequently, we are unlikely to see the back of tariffs anytime soon.
The views expressed herein do not constitute research, investment advice or trade recommendations, do not necessarily represent the views of T. Rowe Price nor TEXPERS, and are subject to revision over time.

About the Author:

China A-Shares: Is Your Emerging-Market Manager Ready?

By John Lin, guest columnist

With the celebration of the Chinese New Year last week, investors welcomed the year of China A-shares, soon to be included in the MSCI emerging-market benchmarks. But put careful consideration into determining which funds are actually ready to join the festivities.

Index provider MSCI plans a gradual integration for the vast onshore market, whose $8.3 trillion market capitalization is second only to that of the US. Though A-shares will initially account for just 0.7 percent of the MSCI Emerging Markets Index, it’s a major step toward assimilating China’s vast onshore equity universe into global capital markets. At full inclusion of 500 stocks, A-shares are likely to account for more than 20 percent of the benchmark, according to many sell-side estimates. Over the long term, the index revisions are expected to unleash $100 billion of investment in A-shares through EM vehicles.

Increasing Exposure to Chinese Markets

But are emerging market funds ready for the change? Overseas investment funds have been increasing exposure to China, according to a recent Bloomberg report. Yet even though 87 percent of mutual and index funds invest in Chinese equities—and some A-shares are already accessible—their holdings remain concentrated in offshore H-shares, traded in Hong Kong, and US-listed American depositary receipts, or ADRs.

Click image to enlarge.

Nearly three-quarters of the funds don’t hold any onshore shares. China A-shares account for only $14 billion (or 1.7 percent) of assets under management in emerging market funds (Display, left). And only 10 emerging market funds hold more than 10 percent in onshore equities (Display, right).

There are good reasons to be cautious about A-shares. Investors need to navigate structural imbalances in China’s debt-laden economy, concerns about the government’s macroeconomic stewardship and the large contingent of state-owned enterprises in the market.

Ignoring A-shares, however, means missing the full potential of China’s expansion. For example, the onshore market is full of growing healthcare companies serving the country’s aging generation. Many technology firms from the Shenzhen market are inaccessible offshore. The market also provides access to China’s explosive consumer growth and local brands popular with the growing middle class; shares of Kweichow Moutai, the distiller of a popular grain liquor, more than doubled on the Shanghai Stock Exchange over the last 12 months due to swelling demand.

What Does It Take?

But what does it take to invest effectively in China A-shares? We think three key competences will determine success:

• Boots on the ground—There’s no substitute for research heft. Funds must be armed with field research from professionals with deep experience on the ground in China. These teams need to be fully versed in the nuances of China’s growing economy, know the players inside and outside the companies, and be able to identify firms with good governance. It’s also important to make sure that an EM fund has enough analysts to cover the market effectively.
• Quantitative capabilities—There are more stocks listed in the China A market than in either the Nasdaq Stock Market or New York Stock Exchange. MSCI’s inclusion of 222 A-shares into its EM benchmark increased the number of stocks in the index by more than 25%. Moreover, there are now more than 1,900 A-share stocks accessible to foreign investors through the Stock Connect scheme, more than doubling the universe of investible equities in China. This favors research teams already familiar with the onshore landscape, in our view. We also think funds that know how to combine quantitative tools with fundamental analysis will have an edge when combing the vast pool of A-shares to identify portfolio candidates.
• Active advantages—Research shows that active investing strategies are especially effective in emerging markets, which are less efficient than developed markets. In China’s A-share market, which is dominated by retail investors, inefficiencies abound. These retail investors often lack critical information about company performance, and information dissemination is imperfect. For example, it can take months for the market to respond to sell-side analyst upgrades. This environment favors a hands-on approach that focuses on long-term fundamentals and investment themes.

A-Shares Are Different

Investing effectively requires a thorough understanding of how China’s top-down politics ripples through the economy. Though politicians’ rhetoric can be discounted in Western markets, China’s political class often sets the rules in the market.

For example, the government’s focus on reducing air pollution is creating winners and losers in the transportation industry. A curb on diesel trucks is benefiting Chinese rail operators and vehicle manufacturers that meet emissions standards.

Funds must be able to identify companies with interests that don’t align with minority shareholders. Many state-owned enterprises will prioritize public responsibilities over profit maximization. Meanwhile, professionals need to be familiar with tycoons who might siphon off profits for side projects.

To pilot a portfolio through these challenges, familiarity with the onshore landscape is indispensable. But we think many emerging-market investors may not be equipped with what it takes to find stocks with the strongest return potential. Ask your fund manager the right questions to find out whether they are ready—or not—to fully participate in a new year of opportunities across all of China’s stock markets.

The views expressed do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AllianceBernstein portfolio-management teams or TEXPERS.

About the Author

John Lin

John Lin is a portfolio manager for China Equities and also serves as a senior research analyst, responsible for covering financials and real estate companies in China. He joined AllianceBernstein in New York in 2006 as a research associate for US Small and Mid-Cap Value Equities and transferred to the Hong Kong office in 2008. Previously, Lin was an investment-banking associate at Citigroup. He holds a bachelor's degree in environmental engineering from Cornell University and a master's degree from The Wharton School at the University of Pennsylvania.

Investing in the Emerging Millennial Boom

In China, 35 percent of people born in the 1990s is expected to graduate from college,
up from just 4 percent among their parents, according to a Goldman Sachs report. 

By guest columnists Laurent Saltiel, Sergey Davalchenko, Naveen Jayasundaram and Kate Huang

Millennials are becoming a powerful force in emerging markets. Understanding the social and consumer dynamics of this generation can lead to surprising investment opportunities in diverse sectors.

People born in the 1980s and 1990s are coming of age. Commonly known as millennials, this segment of the population is becoming increasingly important as contributors to society and drivers of consumption growth.

Click images to expand.

In emerging Asian countries, the millennial engine is racing ahead. Millennials account for a larger portion of the population (Display 1) and are wealthier in aggregate than their developed-market peers (Display 2). Since they’re often better educated than their parents, they enjoy brighter job prospects. And Asian millennials have vastly different habits and tastes from past generations. Businesses that successfully cater to this generation can enjoy prolonged growth, in our view.

China Leads the Way

China deserves special attention. With 415 million millennials and a relatively high per capita income, spending power of the younger generation in China is much greater than in other emerging countries.

In China, 35 percent of people born in the 1990s is expected to graduate from college, up from just 4 percent among their parents, according to a Goldman Sachs report. Since 70 percent of Chinese millennials already own a home, they have more disposable income than young Americans, who are typically saddled with student loans. It is no surprise that recent surveys show greater optimism about the future among emerging market millennials than their western counterparts.

Private Education Is Booming

Education is a top priority. Owing to cultural norms in Asia, parents spend a disproportionate amount of their income on education (Display 3).

Click image to expand.

China stands out for several reasons. First, as a result of China’s “one child” policy, families are often willing to spend handsomely to ensure their child’s success. Second, the number of high-quality universities is limited. Third, older Chinese millennials who have reaped the benefits of a better education are keen to invest heavily in their child’s future.

Private companies have stepped up to serve needs not addressed by the country’s public school system. Examples include New Oriental Education & Technology Group, a household name in K–12 after-school tutoring in China. Many millennials send their young children to New Oriental’s early-education classes. As they grow older, these kids join the company’s tutoring programs for hypercompetitive exams that are a prerequisite to enter China’s best universities.

Travel Bug Is Spreading

Beyond education, Chinese millennials are also passionate about travel. In 2016, Chinese people aged 18 to 34 made 82 million trips abroad, accounting for 60 percent of the country’s foreign travel and spending more than $150 billion. By comparison, Americans of all ages made 75 million journeys abroad last year. As more young people enter the workforce, we expect Chinese outbound tourism to grow at more than double the global rate over the next five years.

Young Chinese also have travel preferences that are more similar to those of their western peers. For example, over 70 percent of Chinese millennials rely on online resources to plan their trip. They increasingly shun popular destinations like Paris and Tokyo in favor of unique experiences like watching the Northern Lights in Finland. While older Chinese may spend a chunk of their travel budget on a Louis Vuitton bag, Chinese millennials seek to invoke similar envy among their friends by instantly sharing their travel experiences on social media platforms like WeChat and Weibo.

For example, Ctrip.com, the country’s leading online travel agency, serves as a one-stop shop for all travel needs from air and hotel booking to packaged tours and corporate travel. The company is also investing in travel guides and alternative accommodation (like TripAdvisor and Airbnb).

Millennial dynamics vary from country to country. In India, for example, large lenders like HDFC Bank are capturing market share by creating online banking tools that fit the lifestyle of a millennial customer. In Vietnam, shopping mall operators like Vincom Retail are catering to millennials’ preference for modern retail over traditional wet markets and mom-and-pop stores, as well as their desire for international brands and entertainment venues.

For investors, the millennial boom is an exciting opportunity. But it requires a long-term perspective on cultural and consumer nuances of individual markets. By focusing on the constantly changing needs of young people, we believe investors can discover companies poised to benefit from demographic trends that will unfold over a generation or more.

The views expressed do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams or TEXPERS.

About the Authors

Sergey Davalchenko

Sergey Davalchenko has been a portfolio manager for Emerging Markets Growth since March 2012. He also served as a portfolio manager on the International Large Cap Growth team from 2011 to early 2017. Before joining AB in 2011, Davalchenko was a senior international analyst at Global Currents Investment Management, a subsidiary of Legg Mason. Prior to that, he worked as a portfolio manager at Fenician Capital Management, where he was a partner. Early in his career, Davalchenko specialized in international equities in various analyst and portfolio-management roles for the State of Wisconsin Investment Board and Oppenheimer Capital. He holds a Bachelor of Science in finance from the University of Wisconsin.

Kate Kuang

Kate Huang is a research analyst on the Emerging Markets Growth team, a position she has held since 2014. Huang was previously a research analyst at Asian Century Quest Capital. Prior to that, she was a senior research associate at AB Bernstein and, before that, a counterparty credit risk analyst at Bear Stearns/JPMorgan Chase. Huang began her career as a counterparty risk analyst at Barclays Capital. She holds a bachelor's degree n economics and statistics from Mount Holyoke College and a master's degree in finance from Columbia Business School.

Naveen Jayasundaram

Naveen Jayasundaram joined AB in 2014 as a research analyst on the Emerging Markets Growth team. He was previously a junior engagement manager in the corporate finance practice at McKinsey. Jayasundaram began his career as a product manager at Microsoft. He holds a Bachelor of Science in electrical engineering from the University of Texas at Austin and a master's degree from the Kellogg School of Management at Northwestern University.

Laurent Saltiel

Laurent Saltiel has been chief investment officer of Emerging Markets Growth since March 2012. He also served as chief investment officer of International Large Cap Growth from 2010 to early 2017. Prior to joining AB in 2010, Saltiel spent eight years at Janus Capital, where he most recently led several international and global growth portfolios. Before that, he worked as a research analyst covering the materials and consumer sectors, as well as a broad range of stocks in Brazil and India. Saltiel was previously a research analyst at RS Investments, where he covered technology and healthcare. Prior to entering the investment business, he spent seven years as a marketing executive at Michelin, where he held full-time roles in Japan, Mexico and his native France. Saltiel holds a bachelor’s degree in business administration from the École Supérieure de Commerce de Paris and a master's degree from Harvard Business School.