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.
Subscribe to 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.
-
Which UK region has the most in savings? Average savings by areaThe amount people have in their savings differs from region to region in the UK. How does your nest egg compare to those living nearby?
-
Doug and Mary Perkins: Specsavers’ clear-sighted foundersHelped by the deregulation of the sector in the 1980s and brilliant advertising, Mary Perkins and her husband Doug have taken Specsavers to the top of the optometry market
-
Investment opportunities in the world of Coca-ColaThere is far more to Coca-Cola than just one giant firm. The companies that bottle and distribute the ubiquitous soft drink are promising investments in their own right.
-
Streaming services are the new magic money tree for investors – but for how long?Opinion Streaming services are in full bloom and laden with profits, but beware – winter is coming, warns Matthew Lynn
-
Trainline: a cheap cash machine for investorsOpinion Trainline’s shares have slumped owing to concerns about growth, but the sell-off seems overdone
-
Look to British stocks to lead the charge as the Magnificent Seven falterOpinion Gervais Williams, fund manager, The Diverse Income Trust, picks three British stocks where he'd put his money
-
'Pension funds shouldn't be pushed into private equity sector'Opinion The private-equity party is over, so don't push pension funds into the sector, says Merryn Somerset Webb.
-
Greg Abel: Warren Buffett’s heir takes the throneGreg Abel is considered a safe pair of hands as he takes centre stage at Berkshire Hathaway. But he arrives after one of the hardest acts to follow in investment history, Warren Buffett. Can he thrive?
-
Who will be the next Warren Buffett?Opinion There won’t be another Warren Buffett. Times have changed, and the opportunities are no longer there, says Matthew Lynn.
-
Will Comstock crash – or soar?Opinion The upside for Comstock, a solar panel-recycling and biomass-refining group, dwarfs the downside, says Dominic Frisby.
