| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
East Capital's Emerging and Frontier markets strategy delivered exceptional 2025 performance, with emerging markets returning 34% and frontier markets 47%, outperforming the S&P 500 by 16.5% - the strongest relative performance since 2008. Key drivers included China's AI breakthrough moment demonstrating competitive technological capabilities, Korean memory stocks Samsung and SK Hynix surging 130% and 278% respectively on AI data center demand vastly outstripping supply, and broad-based frontier market strength led by Vietnam's 42% return. The managers expect memory stocks to remain a key theme in 2026 given continued earnings upgrades and attractive valuations, with SK Hynix trading at 8.4x P/E versus Nvidia's 21.4x despite comparable growth. Looking ahead, they believe investors will continue seeking alternatives to expensive, concentrated US markets, with emerging markets offering 18% EPS growth and 0.8x PEG ratio versus the S&P 500's 16% and 1.5x. Global investors remain underallocated at 5% versus 11% ACWI weight, presenting opportunity for meaningful capital inflows.
Emerging and frontier markets offer compelling alternatives to expensive, concentrated US equity markets, with emerging markets delivering superior earnings growth at attractive valuations while frontier markets provide diversification benefits and structural growth drivers.
Investors will continue seeking opportunities outside expensive and concentrated US markets. Emerging markets present compelling option with higher earnings growth and lower valuations. Frontier markets strengthened by robust structural growth and improving financial conditions. Two large Uzbekistan IPOs planned for 2026.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 15 2026 | 2025 Q4 | 000660.KS, 005930.KS, 8306.T, NVDA | AI, China, emerging markets, frontier markets, Korea, Memory, Outperformance, Valuations | 000660 KS | China's Deep Seek moment demonstrated competitive AI capabilities potentially more cost-efficient than US hyperscalers. Chinese technological prowess remains underappreciated in AI, driving memory demand from… |
| Oct 8 2025 | 2025 Q3 | - | Artificial Intelligence, China, emerging markets, frontier markets, interest rates | - | East Capital reports another strong quarter for emerging and frontier markets, driven by Fed rate cuts, liquidity, and a powerful AI-led rally across Asia. Chinese… |
| Jul 7 2025 | 2025 Q2 | - | currencies, emerging markets, frontier markets, Macro, Valuations | - | The commentary focuses on the resurgence of emerging and frontier markets driven by improving macro conditions and investor positioning. Currency strength, easing inflation, and selective… |
| Apr 10 2025 | 2025 Q1 | - | - | - | - |
| Jan 14 2025 | 2024 Q4 | - | - | - | - |
| Oct 9 2024 | 2024 Q3 | - | - | - | - |
| Jul 5 2024 | 2024 Q2 | - | - | - | - |
| Apr 9 2024 | 2024 Q1 | - | - | - | - |
| Jan 15 2024 | 2023 Q4 | - | - | - | - |
| Oct 9 2023 | 2023 Q3 | - | - | - | - |
| Jul 7 2023 | 2023 Q2 | - | - | - | - |
| Apr 14 2023 | 2023 Q1 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
Emerging marketsGlobal equities, especially those outside the U.S., powered equity returns. In emerging markets, shares of companies linked to commodities were the strongest performers as commodities rallied. Even after a strong year for international and emerging markets shares, we still see some of the best value in the world in these areas. |
International Commodities Non-US Best Value | |
Frontier MarketsFrontier markets returned 47% in 2025, delivering attractive risk-adjusted returns supported by low correlations across diverse universe of 20 markets. Expected 4-4.5% structural growth supported by large young populations and reform momentum, with easing monetary conditions supporting domestic investment and consumption. |
Diversification Growth Demographics Monetary Policy Returns | |
MemoryThe AI boom is engendering structural changes in the memory market that should support higher and more consistent profitability. Three key developments are changing industry dynamics: growing demand for customized, high-value memory products like HBM; the need to surmount the memory wall for AI workloads; and increasing constraints on memory manufacturing capacity as more capacity is allocated to HBM production. |
DRAM HBM Semiconductors Samsung SK hynix | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
ChinaChina's economic rebalancing appears to be moving forward. Market liquidity, anti-involution and a measured consumer policy are likely to drive a sustained market performance in 4Q. Fiscal support and ongoing reforms in China is supportive of a stronger currency. |
Growth Policy Currency | |
Emerging marketsGlobal equities, especially those outside the U.S., powered equity returns. In emerging markets, shares of companies linked to commodities were the strongest performers as commodities rallied. Even after a strong year for international and emerging markets shares, we still see some of the best value in the world in these areas. |
International Commodities Non-US Best Value | |
Frontier MarketsFrontier markets returned 47% in 2025, delivering attractive risk-adjusted returns supported by low correlations across diverse universe of 20 markets. Expected 4-4.5% structural growth supported by large young populations and reform momentum, with easing monetary conditions supporting domestic investment and consumption. |
Diversification Growth Demographics Monetary Policy Returns | |
RatesFed cut rates by 25bps on December 10 while describing growth as moderate and inflation as still somewhat elevated. Markets took message as cut now, likely pause soon. The opportunity set was less about calling one Fed meeting and more about trading the path via rates and FX. |
Fed Easing Policy Duration Curve | |
| 2025 Q2 |
Emerging |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 15, 2026 | Fund Letters | Jacob Grapengiesser | 000660 KS | SK Hynix Inc. | Information Technology | Semiconductors & Semiconductor Equipment | Bull | New York Stock Exchange | AI, datacenters, DRAM, Memory, Pricingpower | Login |
| TICKER | COMMENTARY |
|---|---|
| 000660.KS | SK Hynix has solidified its leadership in high-bandwidth memory (HBM), emerging as the exclusive HBM supplier for Microsoft's in-house AI accelerator and securing roughly two-thirds of NVIDIA's anticipated HBM4 demand for its next-generation platforms at meaningfully higher price points and margins than prior generations. |
| 005930.KS | Top gainers included Samsung (+38% in U.S. dollar terms) |
| 8306.T | MUFG is the largest and most diversified Japanese financial group |
| NVDA | AI bellwether NVIDIA's very strong set of earnings in late November helped the AI theme re-assert its dominance when investors breathed a sigh of relief following the results. |
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