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IMPORTANT NEWS: Transition of investment management responsibilities
First Sentier Group, the global asset management organisation, has announced a strategic transition of Stewart Investors' investment management responsibilities to its affiliate investment team, FSSA Investment Managers, effective Friday, 14 November close of business EST.
Global Emerging Markets All Cap
Our Global Emerging Markets All Cap strategy was launched in 2009 and invests in between 30 to 75 high-quality companies that are contributing to a more sustainable future. The strategy’s bottom-up approach allows us to find only the very best businesses from an investable universe of some 65,000 companies. We are looking for companies well positioned to contribute to long-term sustainable development; businesses with high quality management teams, franchises, and financials.
Strategy highlights: a focus on quality and sustainability
- We invest in high-quality companies with exceptional cultures, strong franchises and resilient financials. How we pick companies >
- Our approach is long-term, bottom-up, high conviction and benchmark agnostic
- We focus on capital preservation as well as capital growth – we define risk as the permanent loss of client capital
- Companies must contribute to sustainable development. Portfolio Explorer >
- We avoid companies linked to harmful activities and engage and vote for positive change. Our position on harmful products >
Latest insights
Quarterly updates
Strategy update: Q4 2025
Global Emerging Markets All Cap strategy update: 1 October - 31 December 2025
In November 2025, First Sentier Group (FSG) announced a strategic transition of Stewart Investors’ (SI) investment management responsibilities to its affiliate investment team, FSSA Investment Managers (FSSA). This was decided to be in the best interests of our clients, given the significant overlap in SI’s and FSSA’s investment capabilities and our shared history and heritage.
Introducing FSSA Investment Managers
FSSA has been investing in Asia Pacific and Global Emerging Market equities since 1988 as part of the former Stewart Ivory & Company, which subsequently became First State Stewart. After years of organic growth, the First State Stewart team split in two in 2015, leading to the formation of FSSA Investment Managers and Stewart Investors.
Like SI, we are long-term and quality-focused investors. We pay little attention to the index or short-term performance, preferring to focus on generating absolute returns for our clients in the long run. From our research, we aim to construct relatively concentrated portfolios made up of the best ideas that we can find across Asia and emerging markets. As responsible, long-term shareholders, we have integrated sustainability analysis into our investment process and engage extensively with companies on environmental, labour and governance issues.
Following the transition of SI’s portfolios to FSSA, the Stewart Investors Global Emerging Markets All Cap portfolio is now being managed by Rasmus Nemmoe and Rizi Mohanty.
Rasmus Nemmoe is a Portfolio Manager at FSSA Investment Managers. He joined the team in 2016 and is the lead manager of the FSSA Global Emerging Markets Focus strategies. Rasmus has more than 20 years of investment experience and is based in Hong Kong.
Rizi Mohanty is a Portfolio Manager at FSSA Investment Managers. He joined the team in 2016 and focuses on the Southeast Asian markets as well as Asia ex-Japan equities more broadly. He is the lead manager of the FSSA ASEAN All Cap and FSSA Asian Growth strategies. Rizi has more than 14 years of investment experience and is also based in Hong Kong.
Rasmus and Rizi are supported by a broader team of investment analysts, with an average of 16 years of investment experience and 8 years tenure with the team. All 15 members of the FSSA investment team are analysts first and foremost, including the portfolio managers, and we spend the majority of our time meeting companies, writing research and seeking quality companies to invest in.
How we invest
FSSA’s investment philosophy, which shares its genesis with SI, has remained broadly unchanged since the First State Stewart team was established in 1988. We focus on identifying quality companies, buying them at a sensible price and holding them for the long term. Most importantly, we invest our clients’ capital as if it were our own. As long-term investors and owners of businesses on behalf of our clients, we look for founders and management teams that act with integrity and risk awareness, and dominant franchises that have the ability to deliver sustainable and predictable returns over the long term.
As a team, we conduct over 1,000 direct company meetings each year across Asia and other emerging markets. The most significant source of investment ideas comes from these company visits and country research trips. We find that our reputation as patient, long-term investors has given us unparalleled access to management, which allows us to gain valuable insights and a thorough understanding of the businesses we want to invest in.
As a result of our long-term time horizon and conservative investment approach, our portfolios – and our performance – can look very different to the index. We shy away from “flavour of the month” themes (such as the current AI-driven boom), and instead look for high-quality companies that can deliver attractive returns for much longer than the market expects – and extend our investment time horizon to capture that advantage. When you own quality businesses, time isn’t a risk – it’s an asset.
Our performance may lag in very buoyant or momentum-driven markets, but we usually compensate very quickly once such bubbles burst. Based on historical data, our long-term track record shows that our portfolios tend to perform better in “normal” markets (-15% to +15% returns over one year) and bear markets (more than 15% decline), than in steeply rising markets (defined as over 15% returns over one year).
A smooth transition
Given the significant overlap in SI’s and FSSA’s investment philosophy and portfolios, we know all the holdings well. As part of the transition, we made a few changes to tilt the portfolio towards companies with stronger cash generation, higher returns and better long-term growth prospects. In general, we are adding to holdings in China, where we have found leading businesses like Tencent, with strong competitive advantages and attractive growth at reasonable valuations. We are reducing exposure to India, mainly in cyclical businesses like Tube Investments of India and Motilal Oswal, where valuations are expensive and the growth outlook has deteriorated.
Below, we highlight a few of the key additions and disposals over the fourth quarter of 2025.
New purchases:
Tencent Holdings is the largest social media network and online gaming company in China, with growing businesses in online advertising, cloud services, e-payments/e-commerce and overseas gaming. Tencent has created an ecosystem of businesses which are unrivalled and should continue growing over the medium term. It has continued to develop new functions within WeChat (such as Video Accounts and Mini Shops), which should slowly improve monetisation and enhance the quality of the franchise. At FSSA, we have been shareholders of Tencent since 2005 and have consistently found the management to be effective long-term stewards of the business. In recent times, we have been impressed by Tencent’s AI strategy and its disciplined approach to technology investments, which aligns with our conservative view on AI capex spending.
Sea is the largest e-commerce, fintech and gaming platform in Southeast Asia, with growing businesses in Taiwan and Brazil. The e-commerce business (75% of sales) is complex, but its model is focused on the lowest cost structure and being competitive on prices, which allows Sea to serve a layer of customers that no one else can touch, and profitably too. The margins are admittedly thin for now, but it seems like the hard work is done. From here, it should be easier to grow the business and unlock operating leverage. The management and the culture are worth backing, and execution has been consistently strong across all three businesses.
Nu Holdings is a digital-only bank in Brazil with over 100 million customers. Founded in 2013, it has disrupted large incumbent banks thanks to its superior customer service and lower costs. There is strong alignment with the leadership team and a prudent lending culture. The company has achieved decent profitability while the growth outlook is robust, driven by increasing credit penetration and additional service offerings (such as secured loans and digital payments).
Complete sales:
Milkyway Intelligent Supply Chain is a chemical materials logistics company in China. We sold out of the position on concerns about leverage and poor cash generation.
Motilal Oswal Financial Services is a non-bank financial company (NBFC) in India. We sold out of a lower conviction holding to raise cash for better ideas elsewhere.
Voltronic Power is a Taiwanese company specialising in uninterruptable power supply (UPS). We sold out of a lower conviction holding to raise cash for better ideas elsewhere.
Performance and outlook
With our long-term investment time horizon, we tend not to pay much attention to short-term market fluctuations. We invest on at least a three-to-five-year view, though we often hold on to companies for much longer. In an industry rife with short-termism, we believe our long-term approach stands out from the crowd.
What we have seen, over the past few decades, is that average holding periods for stocks have fallen from over eight years in the 1960s to less than six months today. Yet this shift has come at a cost: it reduces investors’ ability to generate outsized returns that are materially different from the broader market. The reason is simple — as investment horizons shrink, so does the return dispersion between the best- and worst-performing companies. With less time in the market, investors end up tracking the index, not beating it.
Emerging Markets: time horizons matter
MSCI EM Index -dispersion around mean return for top 10% top / bottom stock performers
Source: MSCI Emerging Markets Index, as at 31 May 2025
In a world where markets rise consistently, that might seem like an acceptable outcome. But markets don’t move in straight lines; and in addition to the higher costs and transaction fees that come with frantic trading activity, the bigger issue is that investors miss out on what is far more important – the future value creation that the best companies tend to generate. This is often poorly understood by the market, with many investors simply focusing on the next quarter or year ahead. Yet the real drivers of returns lie in the cash flows that come well beyond that timeframe.
With that context in mind, we highlight the key contributors and detractors from performance over the fourth quarter of 2025.
The largest contributor to performance over the period was Samsung Electronics, a leading manufacturer of memory and semiconductor chips. In recent years, Samsung’s foundry business has been a major point of investor concern, which culminated in significant losses in the first half of 2025. These losses were exacerbated by one-time charges related to US export controls to China. The company has since undertaken a strategic shift from a “capacity-first” to a “customer-first” model, which appears to be bearing fruit. The shares rose during the quarter, as Samsung continued to benefit from surging AI-related demand for its high-bandwidth memory chips as well as tightness in traditional DRAM demand-supply. Strong results from US chipmaker Micron reinforced expectations of a sustained memory upcycle into 2026. With the turnaround in its foundry business and a strong legacy memory business, we believe the risk-reward looks favourable.
Taiwan Semiconductor Manufacturing (TSMC) was the second largest contributor to performance, as it continued to see solid revenue growth and strong demand from cloud AI for its leading-edge chips. Given the lead time and supply shortages, this provides visibility into 2026 earnings and possibly even beyond into 2027. TSMC is expected to invest in capacity expansion, with top line growth to follow.
The third largest contributor to performance was WEG, a Brazilian multinational electrical-equipment company. A leader in transformers and industrial electric motors, WEG continued to deliver solid profits in 2025, despite facing challenges due to US tariffs on imports from Brazil. Over the longer term, AI-driven power demand and the ongoing electrification of grids in Brazil and other key markets where WEG has a presence – including Mexico and South Africa – is expected to drive stronger revenue growth in the company’s core transformer business.
On the negative side, Tube Investments of India was the biggest detractor from performance, as it reported sluggish business performance and rising competition in the electric vehicle (EV) space. Despite its early mover advantage, Tube has struggled to maintain market share. It plans to arrest these challenges by increasing the number of dealership partners and entering new sub-segments in EV battery packs. On a positive note, the core business is stable with robust returns on capital employed, and it generates healthy free cash flow which is being invested in new businesses with high returns potential. In this endeavour, we are backing the management, particularly Vellayan Subbiah (executive chairman), who has an exceptional track record and has created tremendous value for shareholders.
Alibaba was the second biggest detractor. The shares weakened over the last few months of 2025 on concerns about its e-commerce business and the resulting pressure on earnings. Losses from its Taobao Instant Commerce business (food delivery and on-demand retail) weighed on the share price. On the other hand, Alibaba has had a strong run-up over 2025, driven by its investments into AI and growing demand for cloud computing. Alicloud revenue has accelerated in recent quarters and is expected to continue at pace in the coming quarters.
Milkyway Intelligent Supply Chain, a leading Chinese chemical materials logistics firm, was the third biggest detractor, declining due to underwhelming earnings results. The company’s revenue and profit growth lagged analyst expectations due to weak demand across China’s chemicals sector. While the company is taking steps to improve the efficiency of its operations, we nevertheless decided to sell our stake in order to raise cash for better opportunities.
Looking forward
Despite the geopolitical uncertainty triggered by the US administration’s reciprocal tariff policy, emerging-market equities delivered robust performance in 2025. This reflects longer-term developments. The global economy is increasingly being led by emerging markets, a trend we expect to accelerate in the future. As concerns grow over the health of the US economy, investors are considering alternatives, as indicated by the strong demand for emerging-market equities over the last year.
Amid the market rise, it is important to keep a close eye on valuations. The growth in AI-related spending has led to a particularly sharp increase in the shares of chipmakers and other technology firms. While some of the Fund’s key holdings are benefiting from this trend, it is important not to get carried away by the hype around generative AI. In the tech sector as elsewhere, the Fund focuses on businesses with proven management teams and competitive advantages that allow them to capitalise on long-term shifts across emerging markets.
Whether it is the development of Chinese cities as hubs for innovation in medical devices, the formalisation of the Indian economy, the continued financialisation of the South African population, or the growing enterprise resource planning (ERP) adoption by small-to-medium sized enterprises in Brazil, there are plenty of investment opportunities in emerging markets. Yet these kinds of businesses are not widely included in major market benchmarks, which is why the Fund focuses on high-quality companies rather than following the crowd.
SFDR Article 9 and FSSA’s approach to sustainability
All SI portfolios will continue to be managed true to label, with due consideration given to SI’s SFDR Article 9 sustainability requirements. Importantly, both FSSA and SI had operated as one team for 27 years (1988-2015) before the decision was made in 2015 to split into two teams. This is heavily reflected in our investment philosophies and processes and our respective approaches to sustainability.
At FSSA, we believe it is everyone’s responsibility to think about sustainability as part of his or her investment decision-making. We don’t use external consultants or environmental, social and governance (ESG) ratings, nor do we outsource the sustainability work to a separate team. In our research, we focus on evaluating the long-term merits of a given investment opportunity. Given that sustainability issues are effectively investment issues, we believe that these challenges and opportunities – and management’s response to them – can have a significant impact on a company’s returns. As such, we look for evidence that the management operates the business effectively and in the interests of all stakeholders – both now and for the longer term.
While issues relating to climate change, or people and communities, are often the ones that get the most attention, most of our company engagements relate to management quality and corporate governance systems, as we believe that good governance is the foundation on which great companies are built. We often engage with management teams on capital allocation and strategy, remuneration structures and succession planning, board diversity and tenure, and ensuring high levels of transparency and company disclosure – to highlight just a few.
For more information on FSSA, or if you have any questions about the transition, please do not hesitate to contact us.
NB Both Stewart Investors and FSSA have been supported by the same centralised Responsible Investment team within the First Sentier Group, who will continue to support FSSA after the transition of SI funds.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
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Strategy update: Q3 2025
Global Emerging Markets All Cap strategy update: 1 July - 30 September 2025
Emerging markets enjoyed another strong quarter. Given that market indices were driven higher by sharp gains for Chinese stocks that are seen as beneficiaries of the artificial intelligence (AI) boom, it is unsurprising that returns from our strategy lagged some way behind those from the benchmark.
Although some of our Chinese holdings, such as Alibaba, performed well, not all of our holdings there are aligned with the AI theme. Such periods of thematically driven exuberance can be challenging for long-term investors in high-quality businesses who are disciplined around valuations. But we know that our philosophy and process have been proven to deliver over the long term. One of our team, Doug Ledingham, recently wrote a piece explaining why we consciously resist the growing pressure to focus on the short term:
“At Stewart Investors, we have always sought to occupy a space that protects our clients’ capital. One of the threats we are striving to protect it from is short-termism: from the incessant distraction provided by 24-hour news, from the temptation to digest every morsel of noise, from the danger of trying to react to every macro data point or tweet, and from the pressure to fixate on quarterly earnings. That’s increasingly important in a world where long-term thinking is in increasingly short supply.”
You can read the rest of the piece here: Slow has all the power: why we invest alongside long-term owners. It helps to explain why we won’t be abandoning our core beliefs as long-term fundamental investors to chase the AI-driven rally in a bid to match returns from the index in the short term.
The long-term outlook for Indian companies remains bright
The quarter saw a continuation of an unhelpful dynamic: the significant outperformance of the Chinese market relative to India, to which this strategy has a significantly higher level of exposure. Despite this, we remain enthusiastic investors in high-quality companies aligned with India’s economic development. So far, this year has seen a reduction in income taxes and a simplification of the Goods and Service Tax (‘GST’) system. The Reserve Bank of India, meanwhile, has been cutting interest rates. So demand is now being supported by both fiscal and monetary loosening.
There is, of course, more to emerging markets than China and India. Recent trip reports from Indonesia, India and the Philippines are available on our Insights page. Having visited South Korea in September, we are increasingly confident in the changes to corporate governance standards that are unfolding in that country. These echo similar reforms seen in Japan and should have positive effects on shareholder returns in Korea and perhaps across the region more widely – a similar mood of reform now seems to be infecting other countries across Asia.
Continuity and change
It would be remiss not to mention the significant changes that have taken place at Stewart Investors over the last quarter. After acting as careful stewards of our clients’ capital over many years, three of our colleagues stepped back from their portfolio-management responsibilities in August and left the business. While the list of portfolio-management responsibilities within our team looks different now than it did when the quarter began, on a deeper level, nothing has changed: the philosophy and approach that has defined Stewart Investors since 1988 is deeply engrained and continues to define what we do. Our structure is flat. Every member of the investment team is first and foremost an analyst and our collective focus is on identifying high-quality companies, with resilient financials, guided by ambitious stewards.
This strategy’s new lead manager is Jack Nelson, who was formerly its co-manager. He joined Stewart Investors in 2011 and is the lead manager of our Global Emerging Markets Leaders strategy. He continues to apply the same principles to managing this strategy that have guided it since its launch, working as part of the same tight-knit group of investment analysts and drawing on the same common pool of investment ideas.
Activity
We added one new holding to the portfolio during the quarter. Ayala (Philippines: Industrials) is a conglomerate owned by the seventh generation of Zóbel de Ayala family. Its interests span property, banking, car dealerships, renewable energy, and retail. Like us, the Zóbel de Ayala family focus on finding long-term growth opportunities. The Philippines appears to be rich in those opportunities. For example, while around half of Filipinos don’t have a bank account, lenders such as Bank of the Philippine Islands (BPI, in which Ayala owns a significant stake) are opening new branches, acquiring new customers and promoting financial inclusion.1 The Philippines has long been out of favour among international investors but we believe that modest valuations and an increasing focus on shareholder returns should see overseas capital returning to the market.
We sold several holdings where we had lost confidence in the quality of our investment thesis. Vitasoy (Hong Kong: Consumer Staples) has struggled with supply-chain issues. This year, however, its shares have rallied in response to rumours that it would be taken into private hands. This seemed to offer a good opportunity for us to move on and reallocate capital to better ideas.
The situation with home appliance manufacturer Zhejiang Supor (China: Consumer Discretionary) has some similarities. A government subsidy programme introduced earlier this year offers Chinese consumers financial incentives to trade in and upgrade their home appliances. This has helped to foster positive sentiment towards Zhejiang Supor. Looking longer term, however, the outlook for its future growth appears to be muted, so the recent swell of positive sentiment appears to be an opportune moment to sell.
Elsewhere, we sold Hoya (Japan: Health Care) which, despite being listed in Japan, sells the majority of its optical products into emerging markets. We also sold Tata Communications (India: Communication Services) and Jerónimo Martins (Portugal: Consumer Staples). In all three cases, these companies’ shares appeared somewhat expensive given the growth on offer. We believe new ideas such as Ayala – as well as our other existing holdings – now represent a better home for our clients’ capital.
[1] Source: World Bank Global Findex database https://databank.worldbank.org/source/global-findex-database. 2024 data for metric: account (% age 15+) which measures the percentage of respondents having an account at a bank or similar financial institution or using a mobile money service.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
Strategy update: Q2 2025
Global Emerging Markets All Cap strategy update: 1 April - 30 June 2025
The announcement of President Trump’s ‘Liberation Day’ tariffs on 2 April and the short, sharp trade war with China that followed ensured a volatile start to the quarter for emerging markets.
The uncertainty drove share prices sharply lower until the announcement of a 90-day pause on the introduction of the tariffs helped to calm investors. That calm endured even when Israel took direct military action against Iran, with the oil price spiking higher only briefly. Perhaps the most interesting development from our perspective, however, was that the US dollar had its weakest start to the year since 19731. We think the pressure on the dollar could persist and may, in time, encourage capital to flow into emerging markets.
We added two new holdings over the quarter: one in China, one in India. Trip.com (China: Consumer Discretionary) is the country’s largest online travel-booking platform. The company’s founders remain involved in the business and have seen it grow organically as well as through mergers and acquisitions. It survived the dead stop in tourism prompted by the covid pandemic and now seems primed to take advantage of a shift to booking travel online. Although only about 10% of the Chinese population currently has a passport that proportion is expected to increase2. The second addition this quarter was Motilal Oswal Financial Services (India: Financials), a diversified financial-services conglomerate operating in retail and institutional broking, asset management, wealth management, investment banking, and housing finance with an ambitious-but-conservative steward at its helm. It should benefit from meeting the needs of India’s growing middle class. We also continued to build our positions in Cholamandalam Financial Holdings (India: Financials), Alibaba (China: Consumer Discretionary) and Naver (South Korea: Communication Services).
Set against that, we sold EPAM Systems (United States: Information Technology). We have become increasingly concerned about the outlook for IT services businesses, particularly those with a significant level of exposure to the US. EPAM produced a solid set of first-quarter results and its management upgraded their guidance on revenues for the rest of 20253. Despite this, we see a risk that its clients postpone or cancel investments in their IT systems due to the uncertainties currently facing the US economy. As part of our ongoing review of this sector, we also trimmed the holding in Globant (Argentina: Information Technology). We understand the argument that some companies will need IT services businesses to help them to adopt and integrate artificial intelligence (AI) tools. Equally, it may be that its clients actually replace their existing IT services with AI. Elsewhere, we sold Syngene (India: Health Care) and Dr. Lal PathLabs (India: Health Care) to finance additions to other, higher-conviction ideas.
Looking ahead, any renewed weakness in the dollar could be the trigger for capital currently domiciled in the US to begin to flow into emerging markets. We remain particularly positive on the prospects for high-quality companies in India. The central bank recently started cutting interest rates, which should support demand in rural India. Towards the end of the quarter, we attended a conference of Indian companies and were struck by how positive all of them were about the growth opportunities ahead of them over the next 10 years. In our view, this potential growth – and the size of the Indian market – continues to offer powerful support to valuations.
[1] Source: Financial Times, 30 June 2025 ‘US dollar suffers worst start to year since 1973’.
[2] Source: Straits Times, 21 December 2023 ‘China is world’s second-largest economy but its passport is ranked 63rd. Are things looking up?’.
[3] Source: EPAM ‘EPAM Reports Results for First Quarter 2025 and Raises Full Year Revenue Outlook’.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
Strategy update: Q1 2025
Global Emerging Markets All Cap strategy update: 1 January - 31 March 2025
With the threat of US tariffs ever present, the volatility seen across emerging markets in the final quarter of 2024 carried over into 2025. Share prices in India fell sharply due to concerns about a cyclical slowdown. China, by contrast, performed well as investors anticipated a reacceleration in economic growth and began to identify value in many parts of the market. Sentiment was also supported by President Xi, who met executives from a number of private-sector companies.
We added eight new names to the portfolio and sold six. Although it is unusual to see so many names entering and exiting the portfolio, turnover as a percentage of assets under management remained low, at around 9%1. We were, in essence, simply tidying up a number of our smaller positions – the ‘tail’ of the portfolio.
In China, we sold out of Glodon (China: Information Technology) and Hangzhou Robam (China: Consumer Discretionary). These sales were informed by our view of the country’s property market, where we don’t see the issue of oversupply being resolved any time soon. Glodon provides software for construction and development companies. The majority of Hangzhou Robam’s appliances, meanwhile, are sold to housing developers. These sales also allowed us to reallocate the capital to new investment ideas such as Alibaba (China: Consumer Discretionary), S.F. Holding (China: Industrials) and Mindray (China: Health Care).
Alibaba is one of China’s leading e-commerce platforms. It is using the strength of its balance sheet to invest in building its AI capabilities. S.F. Holding has grown into one of China’s leading logistics businesses since its founding in 1992. Its founder remains involved in the day-to-day management of the company. Mindray is a leading medical company. As trade barriers are thrown up around the world, it has the potential to benefit should there be a shift in China towards buying domestically sourced products.
We also added some new names in India while trimming back some others. Share prices in India sold off as the country appeared to be entering a cyclical slowdown. In response, the central bank cut interest rates for the first time since the Covid pandemic in 2020. Valuations in some parts of the market, meanwhile, had begun to appear excessive. We sold out of Godrej Consumer Products (India: Consumer Staples) because it was too expensive for the growth it offered. We sold out of Bajaj Housing Finance (India: Financials) because of liquidity constraints and reallocated the capital into its asset-lite holding company, Bajaj Holdings & Investment (India: Financials) while also establishing a position in sister company Bajaj Auto (India: Consumer Discretionary), a leading manufacturer of motorcycles, scooters and auto rickshaws backed by a high-quality steward.
Other new names in India included Cholamandalam Financial Holdings (India: Financials) and Triveni Turbines (India: Industrials). Cholamandalam is another business associated with the Muragappa family, who we believe to be good stewards of capital. Triveni Turbines, meanwhile, is a leading maker of steam turbines.
We also added a position in Walmart de Mexico (‘Walmex’) (Mexico: Consumer Staples). With the market having taken fright from the elections of Claudia Sheinbaum (in April 2024) and then Donald Trump (in November), Walmex shares had fallen to their lowest multiple since 1996. Despite this, we believe it remains a solid, dependable long-term growth story. The final new name was BDO Unibank (Philippines: Financials) which is the largest bank in the country with a good opportunity to grow in the outlying islands and by developing its digital offering2. We sold Koh Young Technology (South Korea: Information Technology), following a number of missteps in execution and a miss on earnings. We also sold Unicharm (Japan: Consumer Staples). While it has pivoted to adult diapers in response to demographic change, it has found this shift harder than it had originally envisaged.
While we are broadly positive on the outlook for emerging markets, we recognise that there is likely to be ongoing volatility for as long as ‘top-down’ uncertainty – inspired by trade tariffs and geopolitical flux – remains at elevated levels. Valuations are certainly attractive and there remains plenty of domestically driven growth in the markets we favour. Our task is to block out the short-term noise to focus on the underlying quality, growth and stewardship of the companies we invest in.
[1] Source: FactSet as of 31 March 2025.
[2] Source : BDO Unibank – Company Profile (as of 31 December 2024).
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
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For illustrative purposes only. Reference to the names of example company names mentioned in this communication is merely for explaining the investment strategy and should not be construed as investment advice or investment recommendation of those companies. Companies mentioned herein may or may not form part of the holdings of Stewart Investors. Holdings are subject to change.
Certain statements, estimates, and projections in this document may be forward-looking statements. These forward-looking statements are based upon Stewart Investors’ current assumptions and beliefs, in light of currently available information, but involve known and unknown risks and uncertainties. Actual actions or results may differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements. There is no certainty that current conditions will last, and Stewart Investors undertakes no obligation to correct, revise or update information herein, whether as a result of new information, future events or otherwise.
Source: Stewart Investors investment team and company data. Securities mentioned are all investee companies* from representative Asia Pacific All Cap Strategy, Asia Pacific & Japan All Cap Strategy, Asia Pacific Leaders Strategy, Global Emerging Markets (ex China) Leaders Strategy, Global Emerging Markets Leaders Strategy, Global Emerging Markets All Cap Strategy, Indian Subcontinent All Cap Strategy, Worldwide All Cap Strategy and Worldwide Leaders Strategy accounts as at 30 September 2025. *Assets that the strategies may hold which an active decision has not been made, and sustainability assessment does not apply, include cash, cash equivalents, short-term holdings for the purpose of efficient portfolio management and holdings received as a result of mandatory corporate actions. Holdings of such assets will not appear on Portfolio Explorer. Not all strategies are available in all jurisdictions or to all audience types.
The Stewart Investors supports the Sustainable Development Goals (SDGs). The full list of SDGs can be found on the United Nations website.
Source for Climate Solutions and impact figures: © 2014–2025 Project Drawdown (drawdown.org). Source for Human Development Pillars: Stewart Investors investment team.
Source for climate solutions and human development analysis and mapping: Stewart Investors investment team. Contributions are defined by the team as demonstrable contributions to any solution, either direct (directly attributable to products, services or practices provided by that company), or enabling (supported or made possible by products or technologies provided by that company).
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