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Global Emerging Markets Leaders
The strategy invests in 25-60 high-quality emerging markets companies that we consider to be well positioned to contribute to, and benefit from, sustainable development.
Investment objective and strategy
The Fund aims to achieve long term capital appreciation and sustainably invest in companies which both contribute to, and benefit from, sustainable development, achieving positive social and environmental sustainable outcomes. The Fund invests primarily in large and mid-capitalisation equity securities or equity-related securities in emerging economies, including those of companies listed on developed market exchanges whose activities predominantly take place in emerging market countries.
The Global Emerging Markets Leaders strategy launched in April 2020. It invests in 25-60 high-quality emerging market companies that we consider to be particularly well positioned to contribute to, and benefit from, sustainable development.
Leaders simply means that the strategy is focused on companies with a market cap value of at least USD1 billion.
Strategy highlights: a focus on quality and sustainability
- Companies must contribute to sustainable development. Portfolio Explorer >
- We invest in high-quality companies with exceptional cultures, strong franchises and resilient financials. How we pick companies >
- We avoid companies linked to harmful activities and engage and vote for positive change. Our position on harmful products >
- 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
Latest insights
Quarterly updates
Strategy update: Q4 2024
Global Emerging Markets 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 did not fully exit any positions during the quarter but trimmed several of our Chinese holdings. These included Inovance (China: Industrials) which was becoming expensive, and Ping An Insurance (China: Financials) and Hong Kong Exchanges and Clearing (Hong Kong: Financials) which were trimmed to control larger position sizes. We build our portfolios from the bottom up and any top-down views on countries are reflected through the position size which is risk-weighted according to our conviction in each country. China has a large and deep equity market but we fully recognise that companies both in mainland China and Hong Kong are required to operate within very strict regulations set by Beijing. As a result, we typically have lower position sizes in our Chinese holdings to reflect our more cautious approach. Some of the capital raised from these trims was used to add to Samsung Electronics (South Korea: Information Technology), which we continue to believe is a stock we can own for the next decade.