Pacific AM launches its first EM equities active ETF

Pacific AM, the London-based asset manager has launched its first actively managed exchange-traded fund, the Pacific NoS Global EM Equity Active ETF, which started trading on Nasdaq on 23 January.

The Pacific NoS Global EM Equity Active ETF is a value-orientated actively managed emerging market equity ETF, investing in a concentrated portfolio of 20-50 large and mid-cap companies across the major emerging markets.

GEME adopts the same approach as the Pacific NoS Global EM Equity Strategy which launched in August 2024 with a current AUM of c.$700m.

GEME is managed by Pacific AM’s EM sub-advisor North of South Capital, a highly experienced emerging markets firm, founded in 2004, that oversees $4bn for investors globally. The team, led by portfolio managers Kamil Dimmich and Matt Linsey, look for quality businesses that they believe are also undervalued, by combining fundamental qualitative research with a rigorous valuation process that incorporates both macro and stock-specific risks.

It aims to achieve long-term capital appreciation by investing in a concentrated portfolio of large and mid-cap emerging market companies that are undervalued according to North of South’s proprietary “Cost of Capital” valuation framework, which sees the team favour established business models with predictable cashflows.

The net expense ratio is 0.75%.

Founded in 2016, Pacific AM is a modern, diversified, and technology-driven asset manager that manages over $12.3bn in client assets. Pacific AM has achieved considerable success, serving a global client base that includes financial advisers, wealth managers, family offices, pension funds and other institutional investors.

Sebastian Stewart, partner and head of US institutional sales, Pacific Asset Management, said: “At Pacific, we are obsessed with finding innovative solutions to our clients' investment needs. We truly believe the Active ETF structure is the future for US investors looking to benefit from institutional-quality active management in a regulated fund wrapper.

"Active ETFs are typically more transparent, accessible, tax efficient and cost effective, making this a great choice for many clients. The launch of GEME exemplifies Pacific’s forward-thinking approach to product development and putting our clients first.”

Kamil Dimmich, portfolio manager said: “Having been out of favour for the last 15 years, Emerging Markets are now home to some of the most innovative and cash generative businesses in the world, which are also trading at a fraction of the valuations found in the US and other developed markets.

"We believe our process, which differs from many other EM strategies currently available in the market, particularly those that are passive, is specifically designed to identify these sorts of companies; strong businesses, with predictable cash flows that are also undervalued. With this backdrop and as investors look to diversify their portfolios to capture the new sources of growth, it is a really exciting time to be launching GEME.”