On Wednesday, Polen Capital unveiled its latest fund, the Polen Capital Emerging Markets ex China Growth ETF.
PCEM is an actively managed ETF that seeks to offer long-term growth of capital. The fund operates with a net expense ratio of 1.00%.
Primarily, the fund allocates its investments toward companies in emerging markets. Through PCEM, Polen Capital aims to cultivate a robust portfolio of international companies with sustainable competitive advantages.
The fund’s exposure to emerging markets may come from either equities or equity-linked securities. Per PCEM’s prospectus, the fund has no minimum asset requirement in regard to investing in a single country.
Competitive Companies
As for assets within the fund, PCEM seeks companies with competitive advantages in industries with high barriers to entry. Polen Capital defines high-barrier industries as those who require high capital investment, government approval of services, and large-scale distribution processes, among other factors.
To choose companies amid these industries, PCEM uses a fundamental research process to determine competitive advantages. Factors under consideration include return on capital, earning growth, balance sheets, free cash flow generation, and shareholder-oriented management teams.
For an additional value factor, Polen Capital considers ESG factors while scrutinizing potential stock picks. In doing so, the fund evaluates companies for how well they serve their stakeholders, employees, customers, and the environment at large.
PCEM is a nondiversified fund, and as such, may hold a stronger percentage of assets toward particular industries. The fund prospectus notes that the fund may focus on the consumer discretionary and financial sectors at times.
Polen Capital has extensive experience in piloting active funds with a global focus. For example, the Polen Capital Global Growth ETF (PCGG ) has over $130 million in assets under management.
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