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Summary of Key Points from the Conference Call Industry Overview - The report focuses on the asset allocation and performance of major Emerging Market (EM) funds as of the end of July 2025, based on a survey of 56 fund managers conducted by EPFR Global [7][12]. Core Insights 1. **Increased Allocation to Korea and China**: - EM funds have increased their allocation to Korea, with net overweights rising to 3 from 2. - Foreign investors were net buyers of US$4.5 billion in Korean equities in July, marking the highest monthly total since February 2024 [5][22]. - China and Hong Kong saw significant inflows of US$4.3 billion and US$3.8 billion, respectively, in July, with consensus reducing net underweights in China+HK to 8 from 12 [5][22]. 2. **Domestic Investor Influence**: - The equity rally in China was primarily driven by domestic investors, with southbound investors net buying US$14.3 billion of HK-listed equities in August, maintaining a participation rate of approximately 28% in HK turnover [5][22]. 3. **Reduced Exposure in LatAm and ASEAN**: - Consensus cut exposure in Latin America and ASEAN regions, with net overweights in Brazil and Mexico decreasing to 20 from 23 and 5 from 8, respectively [5][22]. - EM funds increased net underweights in Indonesia, Thailand, the Philippines, and Malaysia to 9, 24, 27, and 41 from 4, 23, 25, and 37, respectively [5][22]. 4. **Performance Metrics**: - The MSCI EM index rose by 1% over the past month, with the median fund outperforming the benchmark by 90 basis points [5][22]. - Sectors that significantly outperformed included Brazil Financials, South Africa Materials, and China IT [22]. 5. **Fund Performance Trends**: - The number of funds outperforming the benchmark increased over the past month, with a rise in the dispersion of six- and twelve-month returns [15][22]. - The median beta of EM funds is currently below its five-year average, indicating lower volatility compared to historical performance [15][22]. Additional Important Insights 1. **Cash Allocation**: - Local fund managers in Malaysia reduced cash allocation to approximately 10.3%, deploying 1.3% of cash [5][22]. 2. **Market Sentiment**: - Price momentum, net analyst revision, and size were identified as outperforming quant factors, while reversion, beta, and volatility were key underperformers [22]. 3. **Historical Fund Flows**: - Historical net inflows and outflows from EM funds were noted, with a significant net outflow of US$31.3 billion in 2024 and a year-to-date outflow of US$5.4 billion in 2025 [11]. 4. **Sector Performance**: - The report highlighted that Brazil Consumer Staples, Colombia, Chile, and Turkey also showed strong performance in the past month [22]. 5. **Market Classification Issues**: - There were potential misclassifications of China stocks as Hong Kong, which may affect the combined weight for Hong Kong and China [3][9]. This summary encapsulates the key findings and insights from the conference call, providing a comprehensive overview of the current state of the emerging markets and the performance of various funds.

Market Strategy - The Investment Committee is debating how to trade beta names in a speculative market [1]

Uh and Jeff uh Degraph, why don't why don't we just start right there in terms of I know you've been on this idea that maybe the pure kind of high beta fastest moving stocks in the market have kind of done what they're going to do for you for a while. How are you reading that. >> Yeah, look, I I mean you're you're in the 100th percentile of performance of high beta over the last 3 months.That's actually now in the fourth month. Um and this is usually the time where it starts the transition where just uh you ...

Core Viewpoint - AT&T has experienced a significant stock rally of nearly 60% over the past year, marking a turnaround from a decade of poor performance [1][2] Financial Performance - The company has reduced its long-term debt from a peak of $200 billion to $123 billion, improving its financial health and obtaining an investment-grade credit rating [3] - AT&T's price-to-earnings (P/E) ratio has increased from under 9 to 18, reflecting a healthier business [4][5] Growth Prospects - AT&T's core business is facing slow growth, with guidance for low-single-digit revenue growth this year and an estimated annual earnings growth of just 4% over the next three to five years [6] - The current valuation at 18 times earnings may be considered expensive given the slow growth, leading to skepticism about the continuation of the stock's recent performance [7] Investment Considerations - AT&T offers a dividend yield of 4.1%, supported by a manageable 52% payout ratio, making it attractive for income-focused investors [9] - The stock has a low beta of 0.52, indicating lower volatility compared to the broader market, which may appeal to conservative investors [10] - While the potential for substantial returns may be limited, AT&T could still be a solid buy for retirees and income-focused investors [11]

Core Viewpoint - The investment philosophy emphasizes the importance of a safety margin, shaped by both external experiences and personal characteristics, particularly a low risk tolerance [1][4]. Group 1: Safety Margin Concept - Safety margin is defined as the ability to accept a less optimistic scenario for a company's future performance, ensuring that even in adverse conditions, the investment remains protected [3]. - The approach to investment involves either confronting the complexities of the business world directly or considering the worst-case scenarios to establish a safety margin [3]. Group 2: Investment Philosophy - The investment strategy does not rely on being smarter than the market but focuses on gathering sufficient and reliable information for decision-making [6][7]. - The pursuit of "ten-bagger" stocks is discouraged, as identifying such stocks in advance is rare; instead, the focus should be on achieving a high long-term internal rate of return [8][9]. Group 3: Market Behavior and Emotional Management - Market volatility is acknowledged as inevitable, and the importance of analyzing substantial policy changes and their long-term impacts on stock value is highlighted [15]. - Emotional control is crucial, and practical strategies to mitigate emotional disturbances during market fluctuations are recommended, such as reducing exposure to market information [16]. Group 4: Long-term Investment Conditions - Successful long-term investing relies more on the characteristics of the investor's capital, such as patience and the ability to endure market fluctuations, rather than solely on market conditions [12][13]. - The complexity of the investment landscape necessitates a deep understanding of the market and the investor's psychological readiness for long-term commitments [12][13]. Group 5: Alpha vs. Beta - The distinction between alpha (excess returns from specific assets) and beta (market-wide trends) is emphasized, with a warning against mistaking beta for alpha [17][18]. - The focus should be on identifying alpha opportunities across various industries rather than concentrating on specific sectors during certain market cycles [17][18].

Market Overview - The U.S. stock market is expected to remain volatile due to uncertainty surrounding trade policies, economic concerns, and shifts in investor sentiment, particularly influenced by President Trump's tariffs on major trading partners [1] - Retaliatory measures from trading partners have heightened market anxiety, despite temporary rebounds from hopes for tariff concessions [1] - Key economic indicators such as jobless claims, payroll reports, and corporate earnings are likely to further influence market movements [1] Investment Strategy - Creating a curated portfolio of low-beta stocks is recommended as a strategy to safeguard against market fluctuations [2] - Low-beta stocks such as The Progressive Corporation (PGR), Pearson plc (PSO), TXO Partners LP (TXO), and Jazz Pharmaceuticals plc (JAZZ) are highlighted as potential investment opportunities [2] Company Highlights The Progressive Corporation (PGR) - In 2024, PGR reported a 21% year-over-year increase in net premiums written, totaling $74.4 billion, with active policies growing by over 5 million [7] - The company achieved an 88.8 combined ratio, outperforming its 96 target, driven by strong claims management and operational efficiencies [7] - PGR's competitive advantages in pricing and customer service position it well for continued growth in the insurance sector [7] Pearson plc (PSO) - Pearson experienced a 3% sales growth in 2024, with profits rising by 10% and an EBIT margin of 16.9% [9] - Strategic partnerships with AWS and Microsoft are enhancing Pearson's AI capabilities and expanding enterprise learning opportunities [9] - The company's leadership in assessments and innovative digital offerings support its long-term growth outlook [9] Jazz Pharmaceuticals plc (JAZZ) - Jazz Pharmaceuticals reported annual revenues exceeding $4 billion in 2024, with fourth-quarter revenues reaching a record $1.09 billion [10] - The company's diversified portfolio in sleep, epilepsy, and oncology continues to drive growth, with key products showing strong performance [10] - Robust cash flow and a strong pipeline position JAZZ for continued growth and value creation [10] TXO Partners LP (TXO) - TXO Partners has a strong presence in the oil-rich Permian Basin, benefiting from exploration and production activities [11] - The Mancos Shale project, covering 58,500 contiguous acres, holds nearly 3 trillion cubic feet of natural gas potential, which could significantly increase reserves [11] - Phase I of the project targets a 3,520-acre block estimated to hold 200-300 billion cubic feet of natural gas, potentially doubling existing reserves [11]