For decades Mark Mobius and I have managed various emerging and frontier-markets funds, including Templeton Emerging Markets Investment Trust, the largest London-listed emerging market trust. Just over three years ago we founded Mobius Capital Partners, aiming to offer a truly different investment approach to capture the most exciting opportunities in emerging and frontier markets.
We decided on four key principles:
- We focus on one concentrated strategy only and limit the portfolio’s size
- We invest in the highest-quality emerging businesses, with deep moats (sustainable competitive advantages that fend off rivals)
- We use non-traditional sources to underpin our conviction in our choices
- We act as partners and real investors through constructive engagement with our portfolio companies
We believe that active investing can deliver outsized returns, particularly in the rather inefficient small- and mid-cap sectors in emerging and frontier markets. Our formula has already delivered strong results, making the Mobius Investment Trust one of the best-performing strategies in its segment.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The opportunities in emerging and frontier markets are changing rapidly. There is a new wave of innovation with new business models. With over 80% of the world’s population living in emerging markets and household incomes gradually rising, the needs of the future are very different from the needs of the past.
Africa’s top payment-app
One exciting example is Safaricom (Nairobi: SCOM) in East Africa, which has migrated from providing more traditional communication services to offering the largest mobile payment application on the continent. It has just launched a “super-app” to enhance customers’ experience.
In Asia in particular we are witnessing an economic “miracle” comparable to the post-war developments in Europe: a unique and versatile ecosystem increasingly dominating the world in innovative technologies.
In sectors such as factory automation, sensor technology, autonomous driving, consumer electronics, the Internet of Things (IoT), artificial intelligence and alternative energy, Asia is taking a global lead.
A healthcare supercycle
We are convinced that spending on services, especially healthcare and education, could turn into the supercycle of the next decade. Take Metropolis Healthcare (Mumbai: METROHL). It is a leading provider of medical and laboratory services in India.
Metropolis offers pathology testing, imaging and nuclear medicine, clinical trials, and home-care services. It started as a single laboratory and today operates over 124 clinical laboratories with 2,400 collection centres across seven countries.
Another example is EC Healthcare (Hong Kong: 2138), which operates Hong Kong’s largest non-hospital medical network with over 60 centres in greater China. These are examples of the type of mid-cap company our strategy focuses on. They are often run by the founding entrepreneurs; they have a very dynamic culture and attract great talent; and they are highly innovative with sound balance sheets, excellent management teams and strong local brands. They are often overlooked by the market, but thorough research by our experts helps us identify these leaders of tomorrow.
-
State pension could rise by £560 next year – triggering pensioner tax for first time in 2027Frozen income tax thresholds are on a collision course with the state pension increases, dragging more pensioners into paying tax
-
Could your family be at risk of an unexpected tax bill? How to keep your loved ones in the loopMany families are out of the loop when it comes to planning the financial aspects of both retirement and inheritance
-
Small UK industrial stocks are hidden gemsOpinion Ed Wielechowski of the Odyssean Investment Trust highlights three of his favourite British small-cap industrial stocks
-
Aurora Innovation is running on empty – is it overvalued?Aurora Innovation, a maker of self-driving trucks, may have promised far more than it can deliver
-
'Ride the recovery in emerging markets': Gustavo Medeiros of Ashmore Group tells MoneyWeekInterview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
What is the Enterprise Investment Scheme and should you have one?The Enterprise Investment Scheme is tax-efficient and potentially lucrative. Taking a chance on the scheme could trim your family’s IHT bill, says David Prosser
-
The alcohol industry is suffering as consumers sober up – is it still worth investing in the sector?Changing consumer tastes are rocking the alcohol industry, but the best players are adapting their strategies. Buy them while their shares are still cheap
-
A strange calm in creditCorporate bond markets remain remarkably relaxed, with yields that offer little compensation for risks
-
'The City's big bet on green finance fails to pay out'Opinion Insurers and banks are backing away from “green finance”, and there is not much sign of the green boom we were promised. That’s a problem for the City
-
Why is English football thriving – and can it last?What has gone so right for English football? The national team has found its feet; the Premier League is swimming in money and profits are soaring
