An Emerging World Order: Part 1
Portfolio Managers Peeyush Mittal and Inbok Song explore global supply chain disruption.24/08/2023
A focus on Asia—and providing compelling investment solutions for our clients—is what we believe distinguishes us among investment managers. Our insights into investment opportunities and risks are backed by proprietary research, a collaborative culture and 30 years of experience.
Investing in emerging markets is about looking forward. Representing nearly 80% of global growth and access to a huge and growing middle class, emerging markets equities can offer investors the biggest potential for long-term growth. As active bottom-up investors, we see three structural growth drivers shaping new opportunities:
COVID-19, conflict and supply-chain shocks have impacted trade around the world.
Some emerging markets, like India and Vietnam, are key beneficiaries from reassessed global supply chains, whereas a focus on re- or near-shoring drives opportunities in China and Mexico.
Robust R&D investments have helped emerging market companies get ahead in areas like technology, communications, financial services and e-commerce.
Increasingly these companies are targeting products and services toward their home audiences as well as abroad.
In our experience, active security selection is key to generating returns and managing risks in emerging markets. Based on decades of investing in complex and dynamic markets, our approach is fundamental, company-led and long-term in nature.
Taking inherent volatility into account, we look for companies that can survive and thrive across a full market cycle. These include balance sheets appropriate to the nature of the business, strong competitive positions, and management teams who work on behalf of all shareholders.
Our proprietary ESG research helps us to identify poor governance practices, controversial behaviour, and controversial products using ESG data from various sources of information, including third-party ESG research and Matthews' own analysis. Our research also broadens the opportunity set by including companies that may not yet be rated by third-party providers, especially among small- and mid-cap companies in emerging and frontier markets.
Our portfolio teams leverage the full resources and expertise of the broader investment team to find attractive opportunities. Research trips to emerging markets countries and companies, as well as management discussions are a rich source of idea generation and form an essential part of the investment process.
Over our 30 years of investing in these markets, we have created deep connections with companies and their management teams. In our experience it’s only by looking at businesses close-up that we can identify quality companies capable of delivering sustainable growth through market cycles.
Experienced investment team with local knowledge.
Proven investment process based on fundamental research and company visits.
Active, bottom-up approach, macro-aware.
This high conviction Fund seeks to invest in 40-80 innovative smaller companies early in their lifecycle and hold them until their growth slows.
A core, quality-growth all-cap portfolio of 30-70 companies with a focus on firms that can serve the growing needs of domestic consumers within their market.
The value of an investment in the Fund can go down as well as up and possible loss of principal is a risk of investing. Investments in international and emerging market securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. The Fund invests in holdings denominated in foreign currencies, and is exposed to the risk that the value of the foreign currency will increase or decrease. The Fund invests primarily in equity securities, which may result in increased volatility. The Fund invests in smaller companies, which are more volatile and less liquid than larger companies. The Investment Manager's consideration of ESG factors in making its investment decisions materially impact the investment performance of the Fund. The Fund invests in smaller companies, which are more volatile and less liquid than larger companies. The risks associated with investing in the Fund can be found in the prospectus.