Next Gen Emerging Markets Strategy

Next Gen Emerging Markets Strategy

Next Gen Emerging Markets Strategy

 
 
Summary

The Next Gen Emerging Markets Strategy invests in overlooked emerging and frontier market countries which are large and uncorrelated to global equities. We aim to invest in secular growth opportunities by constructing a concentrated portfolio of high quality companies that demonstrate a sustainable competitive advantage, trading at reasonable prices, which we believe will generate long-term capital appreciation. 

 
 
Investment Approach
Philosophy

We believe investors are overlooking large countries with rapidly growing consumer markets in regions such as Southeast Asia and Africa. These markets resemble the original promise of emerging markets—secular growth opportunities in large, overlooked countries with low correlations to global equities. We firmly believe that identifying quality companies–those with high returns on invested capital, a sustainable competitive advantage to protect those returns, and outstanding management teams—and acquiring them at a reasonable price, allows investors to harness the power of compounding growth over the long term. Outstanding businesses are difficult to find, and therefore we aim to construct a concentrated portfolio of companies that are benefitting from multi-year growth tailwinds. We believe this portfolio provides investors with access to the next generation of emerging markets.

 
Differentiators
Access to Overlooked and Uncorrelated Markets

Our investment universe, including Vietnam, Bangladesh, Indonesia and Nigeria mirrors the early days of emerging market investing. We focus on countries with sizeable, fast growing consumer populations that are in the early development stages. These markets have largely been ignored by investors and represent a small fraction of mainstream EM and global equity indices but can offer less correlated returns at attractive valuations. 

Secular Growth Opportunities

The portfolio is diversified across nascent secular growth themes identified through our travels and research. Across our universe of large, young and fast-growing consumer populations, legacy infrastructure is often poor or non-existent. This is likely to lead to fast evolving trends in industries like fast moving consumer goods, health care and financials. We believe these themes offer a long runway for growth where companies with a superior value proposition and sustainable competitive advantage can benefit from or drive this development.

Consistent, Accountable Process

Using a simple fundamental framework that encourages transparency and accountability, we look for companies with appealing economics, a sustainable competitive advantage and a candid, competent management team. We look to purchase these companies at a substantial discount to fair value. We use a checklist to assess each part of the thesis independently to ensure we are analyzing the company on its merits, not our intuition, to help avoid biases.

 
 
 
Investment Process
1
Idea Generation

We conduct primary research through frequent travel, tapping into networks in the countries we invest in, reading extensively and relying on pattern recognition of similar themes that have developed in other parts of the world. As “infovores,” we constantly seek out new and interesting ideas across a variety of mediums to identify the most promising investment opportunities in our universe.

2
Stock Selection

We follow a consistent and repeatable process. First, we assess the business economics (return on invested capital, addressable market, unit economics) to seek multi-year opportunities that can compound returns at strong rates. Second, we study whether a sustainable competitive advantage exists to help protect that opportunity. Then we model future free cash flows to determine whether the business can be purchased at a substantial discount to fair value. Next, we speak with the management team, looking for candid and outstanding teams aligned with minority shareholders. Finally, we use a checklist to ensure we are analyzing each piece of information objectively to help minimize mistakes.

3
Portfolio Construction

We manage a concentrated portfolio of 30 to 50 names. We establish a position when the stock is trading at an attractive valuation (discount to fair value), with initial position sizes of around 1%. Liquidity and volatility of the country and stock are important considerations. We conduct ongoing analysis of the portfolio’s exposures, correlations and risk drivers to ensure the portfolio is well-balanced and a reflection of our high conviction ideas. We look to hold positions for two to three years.

Next-Gen-EM-Strategy-process-v1
 
 
Portfolio Manager  
Steven Quattry
Steven Quattry
Executive Director
20 years industry experience
 
 
 
 

ご案内の運用戦略の中には、日本でご紹介していないものも含まれています。また、受託資産額が運用上限に達したため受託を一時的に停止している運用戦略が含まれている場合があります。詳細につきましては、お問い合わせ下さい。

リスクについて

受託資産の運用は、受託資産に組入れられた株式その他の有価証券等の価格変動リスクや株式その他の有価証券等の発行体の信用リスク等による影響を受けます。受託資産の運用による損益はすべてお客様に帰属し、元本が保証されているものではなく、元本損失又は受託資産に関して行われる取引に際し預託すべき委託証拠金その他の保証金の額を上回ることとなるおそれがあります。個別の受託資産ごとに投資対象資産の種類や投資制限、取引市場、投資対象国等が異なることから、リスクの内容や性質が異なりますので、投資一任契約を締結する際には、契約締結前交付書面をよくご覧ください。

受託資産の運用に係る費用について

投資顧問契約及び投資一任契約に係る投資顧問報酬として、契約資産額に対して年率2.20%(税込)を上限とする料率を乗じた金額が契約期間に応じてかかります。投資一任契約に基づいて投資信託を組み入れる場合は、投資する投資信託に係る費用等が投資顧問報酬に加えてかかる場合があります。また、一部の戦略では投資顧問報酬に加えて成功報酬がかかる場合があります。その他の費用として、組み入れ有価証券の売買手数料、先物・オプション取引に要する費用、有価証券の保管費用等を間接的にご負担頂いただく場合があります。これらの手数料等は契約内容、契約資産の額、運用状況等により異なる為、事前に料率、上限額等を示すことができません。

当ページの情報は、モルガン・スタンレー・インベストメント・マネジメント株式会社(以下、当社)が、投資一任契約においてご提供する運用プロダクトについての情報提供を目的として作成したものです。本資料は当社が信頼できると判断した情報を元に、十分な注意を払い作成しておりますが、当社はその正確性や完全性をお約束するものではありません。

 

This is a Marketing Communication.

モルガン・スタンレー・インベストメント・マネジメント株式会社
金融商品取引業者 関東財務局長(金商)第410号

加入協会:日本証券業協会、一般社団法人投資信託協会、
一般社団法人日本投資顧問業協会、一般社団法人第二種金融商品取引業協会


プライバシー・ステートメント    •    利用条件    •    オフィス所在地    •    日本におけるモルガン・スタンレー

©  Morgan Stanley. All rights reserved.