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Investment strategy

Emerging Markets ex China

Emerging markets companies often have substantial opportunities and decades of growth ahead. We believe being selective is key to achieving great results: the index is not the best reflection of future growth.

Aerial view of people fishing in traditional outrigger boat in lake with cloud reflections from above in Polonnaruwa, Sri Lanka.

Emerging Markets growth outside of China

An open-minded, patient approach in the least patient markets; helping our clients benefit from powerful growth tailwinds in developing countries by having a clear idea of the market inefficiencies we are trying to exploit.  

A patient portfolio

Emerging Markets ex China is a portfolio of 40-80 companies. This is a relatively new asset class for most, but our specific experience dates to 2005. 

Our key goal is to build strong relationships with likeminded clients. We know we can only do this if we deliver strong investment performance, net of costs, over the long term.  

The number of genuinely world-class companies in emerging markets is growing and we feel very fortunate to be tasked with seeking these out. We must invest with patience and give decisions time to prove themselves.

Exploiting inefficiencies

We appreciate what is underappreciated. And we believe there are three persistent inefficiencies that we are well-placed to exploit for our clients: 

  • Growth duration: many companies grow for much longer than expected 
  • Growth pace: many companies grow much faster than expected 
  • Growth surprise: many companies grow when it’s least expected 

Much of our process relies on the interplay of data, experience, educated creativity and probability. This does not necessarily lend itself to a matrix or a flowchart.

In nearly 30 years, we’ve seen enough unexpected crises to understand the future is uncertain. As investors, our preference is to embrace uncertainty rather than be paralysed by it.
Will SutcliffeHead of Emerging Markets, Partner

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Get the latest investment commentary, portfolio overview, transactions and performance information alongside governance engagement and voting. 

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Strategy portfolio holdings

A list of the top 10 holdings that the representative portfolio invests in.

All figures up to: 31 December 2023

#Holding% of portfolio
1TSMC12.85
2Samsung Electronics7.60
3MercadoLibre5.22
4Petrobras4.68
5Reliance Industries4.28
6HDFC Bank3.74
7Mediatek3.67
8SK Hynix3.49
9Grupo Financiero Banorte 2.29
10Bank Rakyat Indonesia2.14

Strategy holdings by sector

All figures up to: 31 January 2024

1Information Technology38.10%
2Financials19.66%
3Energy13.37%
4Consumer Discretionary11.70%
5Materials6.30%
6Industrials4.08%
7Consumer Staples3.79%
8Communication Services2.41%
9Cash0.61%
Total 100%

Strategy holdings by sector

All figures up to: 31 January 2024

Total: 100%

Please note

The information contained on this page is intended as a guide only and should not be relied upon when making investment decisions. All holdings information is unaudited. Source Baillie Gifford & Co. Please note that totals may not add due to rounding.

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Curious to learn more about our products and what we can offer you? Please get in touch.