Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Investments Emerging Markets topic
No spam. Unsubscribe anytime.
Artisan portfolio managers tell Mendocino trustees index concentration hurt short‑term returns; explain switch from Samsung to SK Hynix
Summary
Artisan representatives told the Mendocino County Board of Retirement the board’s Emerging Markets sleeve has about $32,000,000 in assets and underperformed recently because a handful of memory and AI‑exposed stocks (TSMC, SK Hynix, Samsung) dominated the index; they explained they moved the portfolio’s Samsung holding into SK Hynix and defended a stock‑picking approach that favors off‑index names.
Sean McCoy, a client‑relations representative for Artisan, and Maria Negrete Grusens, the strategy’s lead and founding portfolio manager, updated the Mendocino County Board of Retirement on July 15 about the county’s recently funded Emerging Markets strategy.
“Total total assets today are close to about 32,000,000,” McCoy said, noting the strategy was funded in May 2025 and experienced a $3,000,000 redemption last September. McCoy and Maria said the strategy has outperformed its index since inception but has lagged year‑to‑date because the index’s returns were concentrated in a few memory‑and‑AI related names.
Maria Negrete Grusens said the manager deliberately moved the portfolio away from Samsung Electronics and into SK Hynix before the county funded the mandate. “We made the decision before you funded to move from Samsung Electronics to SK Hynix,” she said, explaining her team views SK Hynix as the leader in the newest memory generation and Samsung as relatively more commoditized.
The presenters emphasized concentration in the emerging‑markets index: McCoy and Grusens noted the top 10 names now account for roughly 40% of the index and that technology — especially memory names — contributed more than 90% of year‑to‑date index returns. Grusens said that, while the team believes in the long‑term AI opportunity, the index’s narrow expression of that theme creates risk. “The idea that the only way to express it is through memory names…we believe other parts of emerging markets offer opportunities,” she said.
Trustees asked about the sustainability of the memory‑driven rally and what would make Artisan reconsider Samsung. Grusens said Samsung would have to demonstrate renewed leadership in the next memory generation and improvements in corporate governance before she would add it back; she cited governance and transparency concerns as a barrier to owning both names.
Artisan also highlighted off‑index opportunities in countries such as Argentina, Greece and Vietnam, and said roughly 40% of the strategy’s holdings are not in the index — an intentional decision to pursue stock selection rather than mimic the benchmark.
The presentation concluded with trustees thanking the managers; the board had no immediate action on the presentation. The managers said they would continue to report performance and positioning at future meetings.
