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Global Emerging Markets (ex China) Leaders
The Global Emerging Markets (ex China) Leaders strategy seeks to invest in 25-45 high-quality companies with exceptional cultures, strong franchises, and resilient financials outside of mainland China. It aims to achieve attractive long-term capital growth and contribute to a more sustainable future across global emerging markets.
It was launched in July 2024, reflecting investor appetite for global emerging market specialist funds without allocations to China, as well as pockets of concern over perceived investment risk and volatility in China.
Leaders simply means that the strategy is focused on companies with a market cap value of at least USD1 billion at the time of investment.
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: Q3 2025
Global Emerging Markets (ex China) Leaders strategy update: 1 July - 30 September 2025
Emerging markets enjoyed another strong quarter. Given that market indices were driven higher by beneficiaries of the artificial intelligence (AI) boom, it is unsurprising that returns from our strategy lagged some way behind those from the benchmark. Such periods of thematically driven exuberance can be challenging for long-term investors in high-quality businesses who maintain a discipline 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 past quarter has seen a continuation of a dynamic that was unhelpful for our strategy’s short-term relative performance: lacklustre returns from our holdings in India. 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 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 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.
Jack Nelson remains this strategy’s lead manager. He continues to apply the same principles to managing it that have guided it since its launch, working as part of the same tight-knit group of investment analysts and drawing on a common pool of investment ideas.
Activity
We added five new holdings to the portfolio over the quarter. There were no complete sales.
New holding: Sea (Singapore: Consumer Discretionary)
In addition to Shopee, the dominant e-commerce platform in Southeast Asia, Sea owns digital entertainment brand Garena and provides digital financial services through SeaMoney. Shopee is increasingly well established around the world, employing 45,000 ‘partner-drivers’ in Brazil.1 We believe Sea now has an opportunity to expand into new markets as well as increasing the penetration of Shopee and SeaMoney. The company’s founder, Forrest Li, remains closely involved in the business but is now supported by a professional management team. He has built a great franchise backed by solid financials (the company has net cash on its balance sheet) that empowers millions of small businesses to grow and create jobs by giving them direct access to their customers.
New holding: Motilal Oswal Financial Services (India: Financials)
This brokerage and wealth management business is poised to benefit from the desire of India’s increasingly wealthy middle class to have greater access to capital markets. It is still managed by its founders, including the eponymous Motilal Oswal and we can see a steady growth path ahead for the coming decades.
New holding: MakeMyTrip (India: Consumer Discretionary)
India’s leading online travel website should benefit from a continuing shift towards booking travel online. Meanwhile, as the disposable incomes of Indian consumers grow, they will increasingly want to travel overseas as well as domestically. While it is 49% owned by Trip.com, the Chinese online travel business, the company’s founders remain involved in the business’s day-to-day activities, supported by a professional management team. It is already a leader in the online travel space in India but the real growth opportunity lies in the offline segment, specifically in bus and hotel bookings, many of which continue to be made in bricks-and-mortar travel agencies.
New holding: ICICI Lombard (India: Financials)
General insurance is one of the lowest penetrated services in India but Prime Minister Modi is committed to a programme of delivering ‘insurance for all’ by 2047; we believe ICICI Lombard, which is a private-sector general insurance provider, will benefit from this drive.
New holding: Cholamandalam Financial Holdings (India: Financials)
Indian financial services business Cholamandalam Financial Holdings, ‘Chola’, is rolling out general insurance across India. As such it should be a beneficiary of the same dynamic as ICICI Lombard. It is associated with the Muragappa family, who we believe to be good stewards of our clients’ capital.
[1] Source: Sea Shopee Celebrates 5 Years in Brazil, Strengthening Income Generation and Entrepreneurial Growth.
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: Q2 2025
Global Emerging Markets (ex China) Leaders 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.
Towards the end of the quarter, we attended a conference at which we met a number of Indian companies. We were struck by how positive all of them were about the growth opportunities in front of them over the next 10 years. In our view, this potential growth continues to offer powerful support to valuations in the Indian market. We added to our existing holding in Bajaj Auto (India: Consumer Discretionary), the world’s largest manufacturer of three-wheeled vehicles, which provide an affordable form of transport. The company is also well placed to play a leading role in India’s growing adoption of electric two- and three-wheeled vehicles.
Although our outlook on emerging markets is positive, we have become increasingly concerned about the outlook for companies dependent on capital investment in IT systems and services. Although we can see the need for many clients to reach out for their help with incorporating artificial intelligence (AI) tools, it may be that AI actually replaces IT services in some areas. In view of the risk that postpone or cancel investments in their IT systems, we pared back our positions in Delta Electronics (Taiwan: Information Technology), Advantech (Taiwan: Information Technology), and AirTAC International (Taiwan: Industrials).
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 continue to see particularly good growth opportunities in India, where the central bank recently started cutting interest rates, and a gradually recovering picture across Asia more broadly. We are currently planning a trip to South Korea, where we hope to improve our understanding of the improvements to corporate governance taking place under the new government. We also hope to gain insight into the progress being made by Samsung Electronics (South Korea: Information Technology). It had a difficult 2024 but we believe it could be turning a corner in terms of its growth outlook.
[1] Source: Financial Times, 30 June 2025 ‘US dollar suffers worst start to year since 1973’.
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 (ex China) Leaders 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. This reset in valuations means the competition between new ideas for a place in the portfolio has rarely been this intense. The result was a busier-than-normal quarter in which we added six new names to the portfolio.
In India, we allocated capital to some new ideas which have been on our focus list for a while but whose valuations meant we were unable to act until now. Info Edge (India: Communication Services) is a technology company whose online jobs portal caters to 132,000 corporate customers and hosts around 100 million CVs1. It also has property, matchmaking and educational portals. Tube Investments (India: Consumer Discretionary) is an industrial conglomerate whose share price had fallen sharply, providing us with what we believe is an excellent entry point. Bajaj Auto (India: Consumer Discretionary) had also sold off allowing us to add this leading manufacturer of motorcycles, scooters and auto rickshaws, which is backed by a high-quality steward. Bajaj Holdings & Investment (India: Financials) is the holding company of siblings Rajiv and Sanjiv Bajaj. They have demonstrated an exemplary track record of delivering returns for shareholders in autos and financial services.
Elsewhere, we built positions in Samsung Biologics (South Korea: Health Care), Alfamart (Indonesia: Consumer Staples), and BDO Unibank (Philippines: Financials). We believe Samsung Biologics can use the strength of its parent company’s balance sheet to add capacity more quickly than its competitors and win market share. Alfamart is the second biggest player in Indonesia’s convenience-store sector2. It plans to roll out new stores across the country over the next decade. Its shares sold off as the market took fright at Indonesia’s new government but we can see a clear and dependable growth path before it. Finally, BDO Unibank is the Philippines’ largest lender3. It is backed the Sy family, who we believe are great long-term stewards.
We made one complete sell during the quarter, Dino Polska (Poland: Consumer Staples), which had performed well but had become too expensive given its long-term growth prospects.
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: InfoEdge: Annual Report 2023-24.
[2] Source: Fitch Ratings Fitch Revises Alfamart's Outlook to Positive; Affirms at 'AA(idn)'.
[3] 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.
Strategy update: Q4 2024
Global Emerging Markets (ex China) Leaders strategy update: 1 October - 31 December 2024
Emerging markets ended 2024 lagging developed markets for the second year in a row. Whilst the MSCI Emerging Markets Index returned 8.1% (USD, total return), developed markets, measured by the MSCI World Index were up 19.2%, driven by strong performance in the United States. Brazil (-29.5%) and Mexico (-26.8%) both had a tough year in 2024 but China, India and Taiwan all posted positive returns1.
Through the last quarter of 2024, markets had to contend with the re-election of Donald Trump and all the expected geopolitical noise that will come over the next four years, as well as the continuing strength of the US dollar. We remain focused on bottom-up stock picking which is at the core of our portfolio construction process and we will continue to seek out long-term growth opportunities regardless of who is the President in the White House.
We bought one new company during the quarter. We have built a position in Naver (South Korea: Communication Services), the leading South Korean internet search engine with a very strong market share. It was founded inside Samsung SDS before being spun out on its own in 1999. It is still run by the founder, Lee Hae-jin who has recently brought in a new management team which is aiming to return the company to a path of steady and profitable growth. One key aim for them is to use the stickiness of their search engine client base to drive increased e-commerce down the same channels. Their e-commerce business is the second largest in South Korea2. Naver’s attractive valuation presented a good opportunity to invest in a business that should achieve double-digit earnings growth each year.
We trimmed several companies in India through the quarter. These included Marico (India: Consumer Staples) and Godrej Consumer Products (India: Consumer Staples) which we believe are now slightly too expensive for our growth expectations in the coming years. We also trimmed our holding in Mahindra & Mahindra (India: Consumer Discretionary) to control risk from the large position size.
We continue to look for high-quality companies which we can buy at reasonable valuations. We believe that valuations in emerging markets are now at very attractive levels alongside long-term growth opportunities that we can back for the next decade. The team is planning many research trips for 2025 to seek out new investment opportunities and update our knowledge of existing holdings. We look forward to sharing more with you as the year progresses.
1 Source: MSCI Index Factsheets as at 31 December 2024. All data USD, total returns.
2 Source: External market research.
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.
Voting
Voting: Q3 2025
Global Emerging Markets (ex China) Leaders voting: 1 July - 30 September 2025
Voting by country of origin
Voting by proposal category
During the quarter there were 80 proposals from nine companies to vote on. On behalf of our clients, we did not vote against any proposals.
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. Voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Voting: Q2 2025
Global Emerging Markets (ex China) Leaders voting: 1 April - 30 June 2025
Voting by country of origin
Voting by proposal category
During the quarter there were 241 proposals from 22 companies to vote on. On behalf of our clients, we voted against eight proposals and abstained from voting on 11 proposals.
We voted against changing the terms of the board at EPAM Systems as the proposed changes would require all directors to stand for election annually instead of on staggered terms. While we understand the rationale for annual elections, we believe that a staggered approach provides continuity and helps prevent excessive turnover. We also voted against changes to limit the liability of certain officers, as we believe the company has demonstrated its ability to attract and retain an admirable management team under the current structure, which encourages managers to think and act as long-term owners. Finally, we voted against the appointment of the auditor as they have been in place for over 10 years. The company has given no information on rotate its auditor, something we believe is important to ensure a fresh perspective is brought to its accounts. (three proposals)
We voted against a proposal at MercadoLibre to move the company’s registration from Delaware to Texas as it did not provide clear reasons for the change, and we do not believe the move is aligned with shareholders’ interests. (one proposal)
We voted against the recasting of votes (the ability for voters to change their original votes on a particular matter in response to new information or changes to a proposal) for directors and the supervisory council at RaiaDrogasil. We believe the principle of recasting votes for an amended group of candidates is poor practice and would prefer the group to be resubmitted for voting. (two proposals)
We voted against the recasting of votes for the supervisory council at WEG as we believe the principle of recasting votes for an amended group of candidates is poor practice and would prefer the group to be resubmitted for voting. We also abstained from voting on a request for a separate board election and the election of a supervisory council position. According to Brazilian voting practices, we are unable to vote for this proposal while simultaneouslysupporting the board in its candidate elections. (two proposals)
By supporting the appointment of the auditor at Jerónimo Martins, we abstained from voting on three other proposals related to auditor appointments. (three proposals)
We abstained from voting on proposals relating to the accounts and acts of the board at Regional. At the time of voting, the company had not released its annual report and/or audited financial statements, leaving us without significant information to make an informed decision. (five proposals)
We abstained from voting on the establishment of a supervisory council at TOTVS as the company had not disclosed which candidates would be up for election to serve on the council. (two proposals)
We voted against a shareholder proposal regarding simple majority voting at EPAM Systems as this topic was already covered by the company's own proposal, which we supported. (one proposal)
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. Voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Voting: Q1 2025
Global Emerging Markets (ex China) Leaders voting: 1 January - 31 March 2025
Voting by country of origin
Voting by proposal category
During the quarter there were 34 resolutions from five companies to vote on. On behalf of clients, we voted against four resolutions.
We voted against executive remuneration at Bank Central Asia because we believed it was excessive. (one resolution)
We voted against the election of two directors and an audit committee member at Samsung Electronics as we do not believe them to be truly independent. (three resolutions)
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. Voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Voting: Q4 2024
Global Emerging Markets (ex China) Leaders voting: 1 October - 31 December 2024
Voting by country of origin
Voting by proposal category
During the quarter there were 41 resolutions from four companies to vote on. On behalf of clients, we did not vote against any resolutions.
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. Voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Portfolio Explorer
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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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