Mark Mobius was born in New York in 1936. As part of his studies he did an exchange programme in Japan, sparking a lifelong interest in the Far East. After completing a doctorate at the Massachusetts Institute of Technology, he worked in Japan and Hong Kong as a management consultant. In 1980 he became a stock analyst for Vickers Da Costa. By 1987 he had been headhunted to run the Templeton Emerging Markets teams, including the Templeton Emerging Markets Investment Trust (TEMIT), which began in 1989.
What was his strategy?
Mobius was a value investor, although he looked for relative value, meaning he was willing to put money into markets with higher price/earnings ratios if they were cheaper than other fast-growing countries. Over time he delegated a lot of the number crunching to the fund’s analysts, leaving him free to focus on examining individual companies from a qualitative perspective, which he thinks is important in emerging markets. Mobius also focused on markets that were liquid and open, and where investors were protected from arbitrary expropriation.
Did this work?
Between TEMIT’s launch in 1989 and his decision to step down as lead manager in 2015, TEMIT returned 12.2% a year – an initial £10,000 investment would have become £188,555 (with dividends reinvested). The same amount in the MSCI Emerging Markets index would have grown at less than 10% a year. Under Mobius the amount of assets invested with the Templeton Emerging Markets teams grew from $100m to around $50bn.
What were his biggest successes?
His best individual investment was in the private shares of a company called China High Speed Transmission Equipment Group, which made gears for wind turbines. Shortly after it was listed on the stock exchange, it was taken over by the conglomerate General Electric, enabling Templeton to make more than 17 times the money that it had put in.
What lessons are there for investors?
Mobius spent so much time flying around the world to meet management teams that Templeton found it economical to buy him his own private jet. While it’s hard for investors to emulate this level of dedication, his stress on the importance of liquidity, transparency and political stability are important. Investing in emerging markets is risky enough without having to worry about whether the government is going to confiscate your assets or that the company’s accounts are fraudulent.