MORIBUS: Globetrotters in search of profits from high-tech discoveries
Emerging markets investment trust Mobius will turn five years old next month. Although the £158 million fund has seen its share price rise by more than 35 per cent, it has faced numerous challenges that the trustees never imagined would happen when they launched it on the UK stock market.
“It’s been a tough time,” acknowledges manager Carlos von Hardenberg, who made his name running the Templeton Emerging Markets investment fund.
‘We have had several problems to deal with: the impact of the pandemic on businesses, the war in Ukraine and the silent war between the United States and China. As a result, there have been many disruptions in the market.
‘Do I look older than I did five years ago? Yes. Am I happy with what we have achieved so far? Yes. Is there more to come? Of course.’
Unlike most competing funds, Mobius’ approach relies primarily on emerging market ‘discoveries’ – finding companies that are not on the radar of other fund managers, but are involved in cutting-edge technology.
Although this down-to-earth approach was disrupted by lockdowns, Von Hardenberg says he is back traveling the world in search of investment gems.
Earlier this month he visited the automotive show in Munich, Germany, and looked at some of the sophisticated technology used in electric cars, technology supplied by some of the companies the trust invests in.
The fund’s two analysts have also traveled to India and Southeast Asia in search of new and interesting investment opportunities.
“We have Taiwanese companies such as Parade Technologies and Sinbon Electronics in our portfolio,” says Von Hardenberg.
‘Both are integral to the advancement of the electric vehicle, producing the integrated circuits used in car display screens and the cables needed to charge cars.
“In India, we have made an interesting investment in Dreamfolks, a platform that allows company employees to access luxury lounges at airports.” Other new holdings include Bluebik, a Thailand-based company that helps companies digitize their operations, and Park Systems, a South Korean company that builds “atomic force” microscopes used in semiconductor manufacturing.
The trust has no direct holdings in Chinese stock markets, although it owns shares in companies listed in Hong Kong. He is also a great admirer of India – one of the most dynamic economies in the world – and South Korea.
Although Taiwan is its largest domestic holding company, most of the companies it invests in have production facilities elsewhere. It does not own shares in Taiwan’s largest company, TSM (Taiwan Semiconductor Manufacturing).
“We are not interested in investing in large-cap companies,” says Von Hardenberg.
‘We want to support entrepreneurs who are creating businesses in their own countries, drawing on highly skilled workforces. This new generation of entrepreneurs excites us.’
The trust takes its name from Mark Mobius, one of the world’s leading experts on emerging markets. Like Von Hardenberg, Mobius is a founding partner of Mobius Capital Partners, which manages the trust and a sister emerging markets fund.
Both partners have large personal stakes (the so-called skin in the game) in the investment trust.
Although Mobius takes a backseat these days, it is invaluable in helping Von Hardenberg and his analysts visit companies they would otherwise have difficulty seeing.
The trust’s stock exchange identification code is BFZ7R98 and its ticker code is MMIT. Annual charges total 1.5 percent. It is not designed for income seekers.
