uploads///Portfolio Breakdown of the SLANX

Portfolio Composition of SLANX through November 2015

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Dec. 28 2015, Updated 3:00 p.m. ET

Deutsche Latin America Equity Fund

The Deutsche Latin America Equity Fund Class A (SLANX) seeks the long-term growth of capital by investing “in Latin American common stocks and other equities (equities that are traded mainly on Latin American markets, issued or guaranteed by a Latin American government or issued by a company organized under the laws of a Latin American country or any company with more than half of its business in Latin America).”

The asset manager defines Latin America as “Mexico, Central America, South America and the Spanish speaking islands of the Caribbean.”

The fund literature states that fund managers focus on three themes while constructing the portfolio:

  • Bottom-up research: Looking for companies with strong fundamentals
  • Growth-orientation: Looking for growth-oriented companies
  • Analysis of regional themes: Looking for stocks that may benefit from social, economic, industrial, and demographic changes
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The fund’s assets were invested across 50 holdings as of September 2015, and it was managing assets worth $213.7 million as of November’s end. As of its September portfolio, SLANX’s equity holdings included Empresa Nacional de Electricidad (EOC), Cencosud (CNCO), CorpBanca (BCA), Embotelladora Andina (AKO.B), and Gerdau (GGB), which formed a combined ~10.3% of the fund.

Historical portfolios

For this analysis, we’ll be considering holdings as of September 2015, as that is the latest available sectoral breakdown. The holdings post-September reflect valuation-driven changes to the portfolio, not the actual holdings.

The consumer staples and financials sectors form the core of the fund. Combined, these two sectors form ~70% of the fund’s assets. The consumer discretionary sector is the only other sector that has been allocated over 10% of the portfolio. Meanwhile, the fund’s managers exited the energy sector post–June 2015.

Compared to November 2014, the weight of the financials sector stands reduced in SLANX, while that of consumer staples stocks has slightly risen. Consumer discretionary stocks form about the same portion as they did earlier.

Stocks from the information technology sector have been clearly favored. They formed 1.5% of SLANX’s assets when 2015 began, and as of November they formed a little less than 6% of the portfolio.

The industrials, materials, and utilities sectors present an interesting picture. SLANX increased its exposure to these sectors intrayear but decreased this exposure as the year progressed.

The fund’s managers have not been shy in churning the portfolio. The fund has the highest rate of turnover among its peers.

Given its high turnover, how has the fund’s performance been year-to-date through November in 2015? Let’s look at that in the next article.

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