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RAFIEMT

RAFI Fundamental Emerging Markets Index

DATA AS OF: 09-30-2018  ASSET CLASS: Equity

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Commentary

The RAFI Fundamental Emerging Markets Index outperformed its benchmark, the FTSE AW Emerging, by 356 bps for the quarter. Value bounced back strongly after underperforming last quarter (-0.9% for MSCI Emerging Markets vs 3.7% for MSCI EM Value). The outperformance was driven by the consumer cyclical and energy sectors which contributed 122 bps and 97 bps respectively. Within consumer cyclicals, underweights to Alibaba (38 bps) and Naspers (30 bps) accounted for over half the outperformance within the sector. Performance within the energy sector was dominated by Petrobras (27 bps) and Lukoil (20 bps). Outside of the consumer cyclical and energy sectors, an underweight to technology firm Tencent accounted for almost 1/3 of the outperformance, which fell over 17% during the quarter.

Trailing Returns

SOURCE: FactSet | Data: As of 09/30/2018 in USD  |  INCEPTION DATE: 01/31/2017

* Inception to Date (ITD) uses the first full month of returns after inception date. All returns prior to inception are simulated, please see disclosures for important information regarding simulated performance.

** Annualized tracking error calculated against each section’s appropriate benchmark using the first full month of returns following index inception. Index returns prior to inception are simulated.

Characteristics

SOURCE: FactSet | Data: As of 09/30/2018 in USD  |  INCEPTION DATE: 01/31/2017

NOTE: Portfolio characteristics derived from FactSet. Data prior to launch is simulated. One-way turnover data is historical average based on simulated history. Capacity is estimated at 50 basis point market impact level.

Top 10 Holdings

SOURCE: FactSet  |  DATA: As of 09/30/2018 in USD

Sectors

SOURCE: FactSet  |  DATA: As of 09/30/2018 in USD

Regions

SOURCE: FactSet  |  DATA: As of 09/30/2018 in USD

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