The future belongs to emerging markets – three EM stocks to buy
Professional investor Carlos von Hardenberg of Mobius Capital Partners picks three of his favourite emerging markets stocks.
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.
Carlos von Hardenberg is a founding partner of Mobius Capital Partners
-
UK food price inflation rate ‘lowest level in two years’, British Retail Consortium finds
News Food price inflation is at its slowest rate since March 2022, according to the BRC. It also found non-food products have gone into deflation.
By Henry Sandercock Published
-
Top-quality, rapidly growing European stocks are selling at enticing valuations
Timothy Lewis, portfolio manager at JPMorgan European Growth & Income tells us where he’d put his money
By Timothy Lewis Published
-
Top-quality, rapidly growing European stocks are selling at enticing valuations
Timothy Lewis, portfolio manager at JPMorgan European Growth & Income tells us where he’d put his money
By Timothy Lewis Published
-
AstraZeneca CEO’s £1.8mn pay rise approved despite shareholder opposition
AstraZeneca hiked its dividend to persuade shareholders to accept CEO Pascal Soriot’s pay rise. Is he worth his salary?
By Dr Matthew Partridge Published
-
Adidas, Nike or Jordans - could collectable trainers make you rich?
The right pair of trainers can fetch six figures. Here's how you can start collecting vintage Adidas, Nike or Jordans now
By Chris Carter Published
-
The industry at the heart of global technology
The semiconductor industry powers key trends such as artificial intelligence, says Rupert Hargreaves
By Rupert Hargreaves Published
-
Three emerging Asian markets to invest in
Professional investor Chetan Sehgal of Templeton Emerging Markets Investment Trust tells us where he’d put his money
By Chetan Sehgal Published
-
What to consider before investing in small-cap indexes
Small-cap index trackers show why your choice of benchmark can make a large difference to long-term returns
By Cris Sholto Heaton Published
-
Why space investments are the way to go for investors
Space investments will change our world beyond recognition, UK investors should take note
By Merryn Somerset Webb Published
-
Time to tap into Africa’s mobile money boom
Favourable demographics have put Africa on the path to growth when it comes to mobile money and digital banking
By Rupert Hargreaves Published