Developing World Fund


Thornburg Developing World Fund concentrates on managing the special risks associated with the emerging markets asset class and on providing strong risk-adjusted returns—by focusing on self-funding companies that generate strong free cash flow and are not dependent on capital markets in times of stress.


“Because of the more volatile nature of the asset class, we pay particular attention to the economies in which we invest. We look for countries with positive current accounts and foreign direct investment numbers—those less reliant on volatile stock and bond flows.”

– Charlie Wilson, PhD



A Unique Collaborative Approach to Research 
The portfolio is concentrated, with around 40–60 names, and is constructed with collaboration and input from managers and analysts across the entire Thornburg investment team.

Growing Businesses Tied to the Emerging Markets Consumer Class 
We want to own a portfolio of promising, growing businesses that are tied to the growth of the emerging markets consumer class.

Companies That Can Fund Their Own Growth 
We are interested in firms that don’t have to turn to external sources and are less likely to suffer permanent loss and impair investors’ capital during times of market crisis.

In short, we also look for financially sound, free cash flow generative countries with limited external dependence.

Managing Volatility in a Way That Matters
Launched during the financial crisis when many emerging markets stocks were down 40% to 60%, the strategy attempts to create a mechanism to participate in the long-term development of the emerging markets and manage volatility in a way that matters.


We have a bias towards higher-quality companies with a more conservative capital structure and don’t believe in going far out on the risk curve to capture the higher returns associated with the emerging markets asset class.


A Focused Opportunity Set
We tend to avoid countries and economies with high external dependence, in part to limit the portfolio’s vulnerability to currency devaluations. This cautious approach to investing in countries where we may have some concern is, we believe, more effective than currency hedging.

Three-Basket Style Diversification
We diversify with three baskets:

  • Basic Value: Companies generally operating in mature industries and which generally exhibit more economic sensitivity and/or higher volatility in earnings and cash flow.
  • Consistent Earners: Companies which generally exhibit predictable growth, profitability, cash flow and/or dividends.
  • Emerging Franchises: Companies with the potential to grow at an above average rate because of a product or service that is establishing a new market and/or taking share from existing participants.


  • By style, using Thornburg’s basket construct
  • By currency, with sensitivity to stability versus volatility
  • By market cap, with significant portions devoted to small-, mid-, and large-cap stocks
Important Information