Justin Leverenz: Oppenheimer Developing Markets Fund

Justin Leverenz never followed the crowd. While other students at the University of California, San Diego in the 1980s were studying Japanese, Mr. Leverenz, now portfolio manager of the $25 billion Oppenheimer Developing Markets Fund, began to learn Mandarin.
JUL 17, 2012
Turns out he made the better choice. Now fluent in a language spoken by roughly a billion Chinese, Mr. Leverenz spends about six months a year on the road visiting developing countries. And while his educational background is in developmental economics, biology and genetics, he takes his investment management cues more from the world of art than from business. Mr. Leverenz, an avid collector, sees many similarities be-tween art and investment management. “In both, you have a very disproportionate amount of talent in a very small number of people,” he said. “That's why active management is very controversial right now.” What distinguishes talented investment managers and artists from the rest is their philosophies, Mr. Leverenz argues. “Did anyone ask Picasso about his process? No, they asked about his philosophy,” he said. “An investment philosophy, when well articulated and consistent, can be a navigation tool for investors.” Mr. Leverenz's philosophy is to focus on the big picture. “So much of the stock market is concerned with the short term, like quarterly earnings,” he said. “We're passionate about ideas.” The main idea Mr. Leverenz is passionate about these days is that there is a paradigm shift going on in emerging markets. When he started as an emerging-markets-equity analyst in the 1980s, emerging-markets stocks moved like a yo-yo, with no absolute returns over a long period of time. “It was a trader's market,” he recalls. The reason for the volatility was that the underlying economies of the emerging markets, such as China and Brazil, were highly volatile themselves. But he said that's changed; underlying economies are now much more stable because they went through a lot of “self-healing,” in which they weaned themselves off foreign investments and started growing on their own. The underlying stability hasn't translated to emerging-markets equities yet, but over the next five to 10 years, Mr. Leverenz sees that decoupling creating opportunity. And while that big-picture thesis paints a bullish case for the emerging markets, that's not what drives his stock picking. “We're always strategic,” he said. We're focused on extraordinary companies, not countries.” Mr. Leverenz concentrates on long-term durable-growth companies and stays away from the cyclical commodities and financial services companies that tend to dominate emerging-markets indexes. “Often, benchmarks get people in trouble,” he said. So rather than focusing solely on companies in countries with the highest growth rates, he's happy to find ideas in emerging markets that aren't growing nearly as quickly. “It's a common mistake that you have to participate in the countries that are growing the fastest,” he said. “Two countries we like are Mexico and the Philippines. There's no question of them outgrowing China.” Investors who have bought into Mr. Leverenz's philosophy have been rewarded over the past five years with annualized returns of 3.6%, more than 500 basis points better than the average emerging-markets-equity fund, according to Morningstar Inc.

Latest News

Integrated Partners, Kestra welcome multigenerational advisor teams
Integrated Partners, Kestra welcome multigenerational advisor teams

Integrated Partners is adding a mother-son tandem to its network in Missouri as Kestra onboards a father-son advisor duo from UBS.

Trump not planning to fire Powell, market tension eases
Trump not planning to fire Powell, market tension eases

Futures indicate stocks will build on Tuesday's rally.

From stocks and economy to their own finances, consumers are getting gloomier
From stocks and economy to their own finances, consumers are getting gloomier

Cost of living still tops concerns about negative impacts on personal finances

Women share investing strengths, asset preferences in new study
Women share investing strengths, asset preferences in new study

Financial advisors remain vital allies even as DIY investing grows

Trump vows to 'be nice' to China, slash tariffs
Trump vows to 'be nice' to China, slash tariffs

A trade deal would mean significant cut in tariffs but 'it wont be zero'.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.