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Global Emerging Markets (ex China) Leaders

Global Emerging Markets (ex China) Leaders

The strategy launched in 2024 and seeks to invests in between 25-45 high-quality emerging markets companies with a total stock market value of at least US$1 billion, but excluding China.

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

  • Companies must contribute to sustainable development.

  • 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

Strategy name change

Please note, from 21 November 2024 Stewart Investors Global Emerging Markets (ex China) Leaders Sustainability name will be updated to Global Emerging Markets (ex China) Leaders.  By 30 June 2025, the Stewart Investors Australian Unit Trust Fund names will be updated to reflect these Strategy name changes. Please refer to this note for further information. 

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Quarterly updates

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.

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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.

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Select Strategy update and/or Proxy voting to produce a report. You can then download a copy of the report by clicking on the button.

You can build a bespoke report for all our strategies on the full Quarterly update report.

Stewart Investors Quarterly Client Update Q1 2025

1 January - 31 March 2025

Quarter update

Risk factors

This material is a financial promotion for the Stewart Investors strategies – Asia Pacific and Japan All Cap, Asia Pacific Leaders, Asia Pacific All Cap, European All Cap, European (ex UK) All Cap, Global Emerging Markets All Cap, Global Emerging Markets Leaders, Indian Subcontinent All Cap, Worldwide All Cap and Worldwide Leaders – and is intended for professional clients only in the UK, Switzerland and EEA and professional clients elsewhere where lawful.

Within the EU/EEA and Switzerland, the European (ex UK) strategy is only available to investors via a segregated mandate account.

Investing involves certain risks including:

  • The value of investments and any income from them may go down as well as up and are not guaranteed. Investors may get back significantly less than the original amount invested.
  • Emerging market risk: Emerging markets tend to be more sensitive to economic and political conditions than developed markets. Other factors include greater liquidity risk, restrictions on investment or transfer of assets, failed/delayed settlement and difficulties valuing securities.
  • Indian Subcontinent risk: although India has seen rapid economic and structural development, investing there may still involve increased risks of political and governmental intervention, potentially limitations on the allocation of the strategy’s capital, and legal, regulatory, economic and other risks including greater liquidity risk, restrictions on investment or transfer of assets, failed/delayed settlement and difficulties valuing securities.
  • Specific region risk: investing in a specific region  may be riskier than investing in a number of different countries or regions. Investing in a larger number of countries or regions helps spread risk.
  • Currency risk: the strategies invest in assets which are denominated in other currencies; changes in exchange rates will affect the value of the strategies and could create losses. Currency control decisions made by governments could affect the value of the strategies’ investments and could cause the strategies to defer or suspend redemptions of shares.
  • Concentration risk: the European Sustainability and Worldwide Leaders Sustainability strategies referred to in this material invest in a relatively small number of companies which may be riskier than a strategy that invests in a large number of companies.
  • Smaller companies risk: investments in smaller companies may be riskier and more difficult to buy and sell than investments in larger companies.

Where featured, specific securities or companies are intended as an illustration of investment strategy only, and should not be construed as investment advice or a recommendation to buy or sell any security.

If you are in any doubt as to the suitability of our strategies for your investment needs, please seek investment advice.

Investment philosophy

  • We are stewards: Our role is to allocate society’s capital to productive uses, in accordance with our Hippocratic Oath
  • We are long term: Our time horizon is measured in years, not weeks, and we value companies accordingly
  • We invest only in companies contributing to a more sustainable future: We engage constructively as owners to help companies on their sustainability journeys
  • We invest only in high-quality companies: We seek out companies with exceptional cultures, strong franchises and resilient financials
  • We believe capital preservation is important for capital growth: We define risk as the possibility of the permanent loss of client capital

Investment objective

To generate attractive long-term, risk-adjusted returns by investing in the shares of high-quality companies that are particularly well positioned to contribute to, and benefit from sustainable development.

Important information

This material is for general information purposes only. It does not constitute investment or financial advice and does not take into account any specific investment objectives, financial situation or needs. This is not an offer to provide asset management services, is not a recommendation or an offer or solicitation to buy, hold or sell any security or to execute any agreement for portfolio management or investment advisory services and this material has not been prepared in connection with any such offer. Before making any investment decision you should conduct your own due diligence and consider your individual investment needs, objectives and financial situation and read the relevant offering documents for details including the risk factors disclosure. Any person who acts upon, or changes their investment position in reliance on, the information contained in these materials does so entirely at their own risk.

We have taken reasonable care to ensure that this material is accurate, current, and complete and fit for its intended purpose and audience as at the date of publication but the information contained in the material may be subject to change thereafter without notice.

No assurance is given or liability accepted regarding the accuracy, validity or completeness of this material.

To the extent this material contains any expression of opinion or forward-looking statements, such opinions and statements are based on assumptions, matters and sources believed to be true and reliable at the time of publication only. This material reflects the views of the individual writers only. Those views may change, may not prove to be valid and may not reflect the views of everyone at First Sentier Investors.

Past performance is not indicative of future performance. All investment involves risks and the value of investments and the income from them may go down as well as up and you may not get back your original investment. Actual outcomes or results may differ materially from those discussed. Readers must not place undue reliance on forward-looking statements as there is no certainty that conditions current at the time of publication will continue. 

References to specific securities (if any) are included for the purpose of illustration only and should not be construed as a recommendation to buy or sell the same. Any securities referenced may or may not form part of the holdings of First Sentier Investors’ portfolios at a certain point in time, and the holdings may change over time.

References to comparative benchmarks or indices (if any) are for illustrative and comparison purposes only, may not be available for direct investment, are unmanaged, assume reinvestment of income, and have limitations when used for comparison or other purposes because they may have volatility, credit, or other material characteristics (such as number and types of securities) that are different from the funds managed by First Sentier Investors.

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Not all First Sentier Investors products are available in all jurisdictions.

This material is neither directed at nor intended to be accessed by persons resident in, or citizens of any country, 

or types or categories of individual where to allow such access would be unlawful or where it would require any registration, filing, application for any licence or approval or other steps to be taken by First Sentier Investors in order to  comply with local laws or regulatory requirements in such country.

About First Sentier Investors

References to ‘we’, ‘us’ or ‘our’ are references to First Sentier Investors, a global asset management business which 

is ultimately owned by Mitsubishi UFJ Financial Group (MUFG). Certain of our investment teams operate under the trading names FSSA Investment Managers, Stewart Investors and Realindex Investments, all of which are part of the First Sentier Investors Group.

This material may not be copied or reproduced in whole or in part, and in any form or by any means circulated without the prior written consent of First Sentier Investors.

We communicate and conduct business through different legal entities in different locations. This material is communicated in:

  • United Kingdom by First Sentier Investors (UK) Funds Limited, authorised and regulated by the Financial Conduct Authority (reg. no. 2294743; reg office Finsbury Circus House, 15 Finsbury Circus, London EC2M 7EB).
  • European Economic Area by First Sentier Investors (Ireland) Limited, authorised and regulated in Ireland by the Central Bank of Ireland (CBI reg no. C182306; reg office 70 Sir John Rogerson’s Quay, Dublin 2, Ireland; reg company no. 629188).
  • Other jurisdictions, where this document may lawfully be issued, by First Sentier Investors International IM Limited, authorised and regulated in the UK by the Financial Conduct Authority (reg. no. 122512; reg office 23 St. Andrew Square, Edinburgh, EH2 1BB; regcompany no. SC079063).

To the extent permitted by law, MUFG and its subsidiaries are not liable for any loss or damage as a result of reliance on any statement or information contained in this document. Neither MUFG nor any of its subsidiaries guarantee the performance of any investment products referred to in this document or the repayment of capital. Any investments referred to are not deposits or other liabilities of MUFG or its subsidiaries, and are subject to investment risk, including loss of income and capital invested.

© First Sentier Investors Group

Full Quarterly client update >>

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.

Strategy update: Q3 2024

Global Emerging Markets (ex China) Leaders strategy update: 1 July - 30 September 2024

This strategy launched during the quarter. We have found that asset allocators tend to have a bifurcated view on China, sometimes choosing to allocate large amounts of capital to China separately and sometimes choosing to avoid the region entirely. By launching this strategy, we are not making any sweeping statement about what we expect to happen in China in the years ahead. We are simply cognisant of the approach that some clients take and with our history of having limited amounts of capital allocated to China in our GEM All-Cap and Leaders strategies, we think we are well positioned to also manage this strategy. 

Most of the quarter’s activity happened in September, as is often the case. It is in such moments, like the biggest market moves since 2009 in China and Hong Kong and rising geopolitical tensions in the Middle East, that we remain grateful for our long-term philosophy. It gives us the ability to step back in moments of such volatility and reminds us to focus on the more important, bottom-up drivers for the companies we own on your behalf.

We have not made any new purchases since launch on 11 July but we have sold out of one position, Kotak Mahindra Bank (India: Financials). We have seen Kotak, and other banks, finding it harder to attract deposits that will allow it and the others to keep growing loans at a fair clip that warrants the valuations the bank is currently on. It used to be the case that public sector banks were so discredited that no depositor would want to risk their savings at one of these state-owned banks. But this sector has been really cleaned up, which is great for the Indian consumer but makes for a more difficult competitive environment for the private sector banks, including Kotak. With growth looking muted and residual concerns about management, we decided to sell our holding.

An area where we are doing a lot of thinking is Poland. Here we hold Allegro (Poland: Consumer Discretionary), Dino Polska (Poland: Consumer Staples) and Jerónimo Martins (Portugal: Consumer Staples), which is listed in Portugal but >50% of revenues are from its Biedronka business in Poland.1 They all experienced strong growth through 2022 and 2023 as inflation helped them increase profit margin but the opposite has now happened. Deflation in food prices and rising costs have squeezed profit margins considerably.

As always, we spend the bulk of our time on continuing to better understand the quality attributes of the companies we invest in and finding similarly resilient ideas to add to the portfolio.

1 Source: Jerónimo Martins Annual Report 2023

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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Proxy voting

Proxy voting: Q1 2025

Global Emerging Markets (ex China) Leaders proxy voting: 1 January - 31 March 2025

Proxy voting by country of origin

Proxy 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. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.

Proxy voting: Q4 2024

Global Emerging Markets (ex China) Leaders proxy voting: 1 October - 31 December 2024

Proxy voting by country of origin

Proxy 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. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.

Proxy voting: Q3 2024

Global Emerging Markets (ex China) Leaders proxy voting: 1 July - 30 September 2024

Proxy voting by country of origin

Proxy voting by proposal category

During the quarter there were 47 resolutions from five 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. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.

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Portfolio Explorer

If you are unable to view the portfolio explorer, please re-open in Google Chrome, Edge, Firefox, Safari or Opera. IE11 is not supported.

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, European All Cap Strategy, European (ex UK) All Cap 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 31 March 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.

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).

Investment terms

View our list of investment terms to help you understand the terminology within this website.

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