Who doesn’t like a discount? How about two discounts? Not only are emerging markets trading at a deep discount to US stocks, the Mobius Investment Trust (MMIT) is trading at a 7.5% discount to its NAV (net asset value).
Managed by co-founder Carlos Hardenberg and the team at Mobius Capital Partners the Mobius Investment Trust specialises in investing in founder-led, innovative mid cap companies across emerging markets.
Founded on 1 October 2018 the Mobius trust now has a five-year track record which investors look for when deploying capital, meaning it is now on the radar of more institutions.
Total NAV return over the five years to October 2023 is 52.19%, comfortably ahead of the MSCI Emerging Markets Mid Cap index total return of 24.3% and 39.5% ahead of the broader MSCI Emerging Markets index.
Around two-thirds of the investment return has come from stock selection rather than market allocation. Over the last three years the portfolio has outperformed in both rising and falling markets as demonstrated by an upside market capture of 121.2% and downside capture of 65.6% (both calculated by dividing the manager’s returns by the returns of the index during the upwards and downwards movement in markets and multiplying that factor by 100).
This unique strategy gives investors access to a concentrated portfolio comprising 25 to 30 of the manager’s best high conviction stock ideas with a market capitalisation below $15 billion.
Hardenberg excludes sectors which are not ESG friendly such as tobacco, fossil fuels, and gambling and actively engages on governance issues with investee companies.
The team seeks out political and regulatory environments which are supportive to business growth and entrepreneurial activity. The manager has access to a broad network of renowned experts, curated over the last 40 years.
One feature we like about the investment approach is the importance it places on governance and on conducting deep due diligence on the people and businesses in which it is looking to invest.
The fund is heavily weighted in the technology and healthcare sectors which make up 55% and 11.6% of the fund’s assets respectively. Taiwan is the biggest country weighting at 25.5% with India at 18.6%, South Korea at 12.6% and Brazil at 10.4%.
Compared to investing in the index, the trust’s portfolio of holdings on average are higher quality with strong balance sheets and high returns on capital and have deep economic moats and sustainable growth opportunities.
Investors should be aware of the trust’s relatively high ongoing charge of 1.45%. This is due to its modest assets relative to operating costs of running the trust. As the assets grow the ongoing charge percentage may fall.
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
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