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Investment trust insider on Mobius Investment Trust – James Carthew: Mobius gains momentum in choppy emerging markets

A recent analyst presentation by Mobius (MMIT) gave me a chance to take the first close look at the investment trust since it launched in October 2018.

MMIT hasn’t had a great start. At 31 May 2020 net asset value had fallen 10.1% and the share price had tumbled 22.9% since launch. The factsheet doesn’t compare the trust to a benchmark but by contrast the MSCI Emerging Markets index slipped 2.9% over this period.

Meanwhile, Templeton Emerging Markets (TEM), the Franklin flagship that Mobius co-founders Mark Mobius and Carlos Hardenberg used to manage, beat the index, returning a flat if stable performance.

Despite the poor start, MMIT has done relatively well since Covid-19 started to hurt markets in February. The managers’ focus on quality stocks with strong balance sheets, defensible market positions and attractive returns on assets has helped. The same is true of Fundsmith Emerging Equities (FEET).

MMIT is differentiated from most other trusts in its peer group in that it has a bias to smaller companies, a fairly concentrated portfolio and it seeks to benefit from improving governance.

Over half the portfolio is accounted for by the 10-largest holdings and the manager says it has a 99.8% active share relative to the MSCI Emerging Markets Index. There is a bias towards technology, rising consumer spending and a growing middle class, healthcare and education.

Stocks are chosen on their individual merits but… read more here