Polen Capital Emerging Markets ex-China Growth ETF (PCEM)

Overview

The fund described is characterized as an actively-managed Exchange-Traded Fund (ETF) with a strategic focus on investing in the common stocks of companies located within emerging markets. The guiding investment philosophy behind this fund hinges on identifying and investing in companies that, according to Polen Capital Management, LLC—the fund's sub-advisor—possess sustainable competitive advantages. This approach suggests a meticulous selection process aimed at companies believed to offer long-term growth and value, particularly those with robust market positions, innovative products or services, and effective management teams capable of navigating the complexities of emerging market economies. The fund commits to allocating at least 80% of its net assets, at the time of purchase, into equity or equity-related securities of issuers based in emerging market countries, underlining a significant commitment to its core investment thesis. Due to its concentrated investment strategy, the fund is categorized as non-diversified, indicating a portfolio that may invest a larger portion of its assets in fewer securities, which could result in greater volatility and risk.

Products and Services

• Actively-Managed ETF

This product is the cornerstone of the fund, offering investors targeted exposure to emerging market equities. The ETF's actively-managed approach allows for dynamic portfolio adjustments based on in-depth market analysis and the evolving investment landscape in emerging markets. This stands in contrast to passively-managed ETFs, which track a pre-set index without attempting to outperform it. The main appeal here is the potential for higher returns, stemming from the fund manager's skill in selecting investments that are poised for growth.

• Equity Investments in Emerging Markets

A critical component of the fund's investment strategy focuses on equity or equity-related securities of issuers located in emerging markets. This encompasses a wide array of investments, including but not limited to common stocks, preferred stocks, and other securities that offer ownership stakes in companies. The deliberate focus on emerging markets is predicated on the potential for high growth rates in these economies, which can often outpace those of more developed countries. However, these investments also come with a higher level of risk due to political instability, currency fluctuations, and other market dynamics characteristic of emerging economies.

• Sustainable Competitive Advantage

Central to the fund's selection criteria is the emphasis on companies that exhibit a sustainable competitive advantage. This encompasses firms that have durable moats—unique strengths that protect them from competition and allow them to maintain high profitability. These might include innovative technology, brand recognition, regulatory licenses, and strong distribution networks, amongst others. By focusing on such companies, the fund aims to invest in businesses that are well-positioned to generate consistent, long-term returns for its investors.