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Global Emerging Markets Sustainability
The strategy was launched in 2009. It invests in the shares of between 30-75 companies in emerging markets.
You can see all of the companies that this strategy invests in by filtering on our Portfolio Explorer tool.
- We define investment risk as losing clients’ money – this means we focus on looking after your money as well as growing it
- Companies must contribute to sustainable development and make a positive impact towards a more sustainable future. 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 >
Quarterly updates
Strategy update: Q3 2024
Global Emerging Markets Sustainability strategy update: 1 July - 30 September 2024
Most of the quarter’s activity happened in September, as is often the case. It is in such moments, like the biggest stock 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 unpredictable change and reminds us to focus on what we believe are more important, company-focused drivers of change.
Over the course of the quarter, we have sold out of one of our Indian banks. RBL Bank (India: Financials), which we purchased in December 2023. We liked the new management team who seemed determined to move the bank towards less risky (more secured) lending. We also thought the company was attractively valued. Unfortunately, the quarter after we purchased the company, it became clear that unsecured bank loans had been growing at over 30%, and the path to a more balanced loan portfolio would be a lot longer than we had expected. Added to that, we are seeing a few banks that are struggling to grow their deposit base which impacts how they can fund their loan growth. For many years, most people and businesses who deposit their money in banks avoided the public sector banks as they feared they may lose their money. The public sector banks have now improved and professionalised which is great for the Indian saver and borrower but tougher for the private sector banks like RBL who now face tougher competition from the public sector banks. With prospects for RBL looking riskier and with better ideas elsewhere, we exited the position.
We sold Yifeng Pharmacy Chain (China: Consumer Staples) as we were worried about increased regulatory oversight, such as price cuts on drugs purchased through medical insurance plans, having a negative impact on profit margins.
We also fully sold Clicks (South Africa: Consumer Staples), another pharmacy chain. Growth has been phenomenal at this business with new store openings continuing at pace and a mix of available goods and services helping to drive profits. The valuation is expensive and we decided to exit the position to fund better-priced opportunities. We think Clicks remains a very high-quality business.