Performance Review

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Annualized Performance
as of 9/30/2019
3 MO:-3.10%
YTD :11.45%
1 YR:-2.91%

Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than that shown here.

For Benchmark information click here

The views expressed in this investment report represent the opinions of PNC Capital Advisors, LLC and are not intended to predict or depict performance of any investment. All information contained herein is for informational purposes and should not be construed as investment advice. It does not constitute an offer, solicitation or recommendation to purchase any security. The information herein was obtained by various sources; we do not guarantee its accuracy or completeness. Fund performance quoted above is for class I shares. Past performance does not guarantee future results. These views are as of the date of this publication and are subject to change based on subsequent developments.


PNC Emerging Markets Equity (class I) Fund returned -3.10% in the third quarter versus a return of -4.25% for the benchmark MSCI Emerging Markets Index.

In terms of country attribution, the Fund underperformed on a country allocation basis, but outperformed on a stock selection basis. Positive country allocation effects came from overweights to Egypt, Vietnam, and Hong Kong. Negative country allocation effects came from overweights to Argentina and Poland, along with an underweight to Taiwan. Positive selection effects came from stock selection in Argentina, Poland, and Taiwan. Negative selection effects came from stock selection in Hong Kong, Korea, and Egypt.

In terms of sector attribution, stock selection drove the majority of outperformance, while sector allocation contributed slightly. Positive sector allocation effects came primarily from an underweight to Materials. Negative sector allocation effects came from overweights to Healthcare and Real Estate. Positive selection effects came from stock selection in Financials, Healthcare, and Industrials. Negative selection effects came from Information Technology, Energy, and Communication Services. 

Emerging markets, as a whole, had their worst quarter in over a year. During the third quarter, macroeconomic influences, including apparent slowing global growth, as well as shifting monetary policy from major central banks, continued to dominate financial markets. Global trade remains a concern, as there continues to be uncertainty around U.S. - China trade talks and the prospects for resolution. We expect global investors will start to focus on the U.S. presidential election in 2020 for any clues on future trade policy. Investors are also increasingly focused on the potential unraveling/restructuring of global supply chains due to various trade disputes and other economic concerns.

Central bank activity continued to trend toward easing, as the Federal Reserve Bank (Fed) cut its fed funds target interest rate range during the quarter and has indicated it sees room to cut further. In addition, many central banks globally have either started to cut rates or continue to cut rates, as compared with the second quarter.

The U.S. dollar strengthened during the quarter relative to the euro and British pound following a spate of weakness earlier in the year. The Japanese yen was largely flat during the quarter and is stronger on a year-to-date basis. Emerging market currencies were largely weaker versus the dollar and posted their worst quarterly performance in over a year, a sign that investors' appetite for risk is waning, in our view.

Turning to Asia, Japan sparked a new trade war with South Korea when it removed the country from its “white list” of countries that are considered to be trusted export destinations. Protests in Hong Kong reverberated through the region, adding to global risk concerns.  India continued to deal with a shadow-banking crisis, while the government announced tax cuts to kick start growth. Exports have continued to suffer in the region, especially to trade-dependent countries in north Asia. Exports to China and in semiconductor products have seen the largest declines, particularly in South Korea.

Europe is the weak link in the global economy right now, with Germany being the weakest. Germany continues to struggle, as economic growth is being impacted by slowing emerging market economies, especially in China, weak automobile manufacturing, and continued trade uncertainties. We believe the country remains at risk given its export orientation and integration into global supply chains. The ongoing Brexit saga continues to weigh on the UK, Europe, and the world more broadly, even as a deal may be in the offing.

Given the continued weakness in Europe, the European Central Bank (ECB) cut interest rates and restarted quantitative easing less than a year after halting the previous quantitative easing program. There is disagreement behind the scenes, particularly from the Germans.

Turning to Latin America, Brazilian pension reform successfully made its way through voting in the lower house of the National Congress. Estimated savings have not (yet) been watered down as much as investors were expecting, which is positive. Mexico has thus far avoided any materially negative impact to its economy from immigration or tariff concerns. 

While market volatility increased, as global central banks withdrew liquidity in previous quarters, those same central banks have become more accommodative over the last two quarters, which should support markets. Global investors remain concerned about high relative levels of developed and developing market indebtedness, geopolitical and trade considerations, populism, central bank policy, and the sustainability of global growth. We continue to closely monitor inflationary pressures, currency prices, and geopolitical and policy risks.


Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than that shown here. Select a Fund to view the most recent month-end performance information or go to each Fund's snapshot page to view most recent month-end performance as well as any waiver or expense reimbursement information.

The information contained in this piece should not be considered legal or tax advice; questions regarding your specific situation should be directed to your legal or tax advisor.

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