As we look at this chart that we're showing for the MSCI EM index sector exposure over time, our emerging markets portfolio's historical exposure looks actually quite different than this index shown here. And a data point that we can provide is we've been overweight and underweight all gics sectors to all eleven of the gics sectors and have had zero exposure to six out of the eleven gics sectors at various points in time since inception. And I think that's a great example of the adaptability
of our portfolio and really our process. And as we think about adaptability, Sadarshan, why do you think not only being active but being adaptable in emerging markets is important. Yeah. Look, when we look at investing, right? We are not ideological. Right? We look at businesses on a bottom up company by company basis. Okay. And the question we ask is, can I take a fire view on this business? Okay. That's question number one.
Then we we try to estimate earnings growth in US dollar terms for the next five years. And that's important because many times people just look at the next one to three years. So we try to take a five year view here. Now what will be the earnings close for the next five years? And then we have a view on what will be the earnings beyond those five years. Now why is that important? Because the earnings growth beyond the five years will determine your terminal multiple at the end of five years.
Now we discount all of these cash flows, and that tells us whether, business is attractive or not. Right? The key here is that we are letting earnings growth data, you know, decide the best talks for us. So we'll do this data guide, our decision making.
And as you can see, you know, I know you have a slide, which shows that If you own Chinese names, you know, over the long term, since inception last thirty plus years, You'd have probably lost forty percent of investment for this long, three plus decades, duration. So it's very important to figure out which part of the market is offering you the best risk adjusted returns.
So having this active mindset means that that literally every day you are thinking What are the best forty, fifty names that I can own in the portfolio? Doesn't mean we'll change up the portfolio every day, but then you need to have that thought process.