We remain confident that the Portfolio owns a collection of competitively advantaged companies that are well-positioned to structurally grow their businesses over the next decade.
Going beyond with the Polen Emerging Markets Growth Team
At Polen Capital, we see emerging markets growth through a long-term lens, taking an active approach strategically guided by independent and curious thinking. With an investment framework built from on-the-ground due diligence and macroeconomic insights and by keeping an index-agnostic, absolute-return mindset, we offer a bottom-up, concentrated portfolio built for the long term and differentiated exposure to emerging markets.
Focusing on our specific set of key growth indicators, our best-ideas approach and research-driven collaboration empower our search for what we believe to be the best investment opportunities across the entire market-cap spectrum within the emerging markets universe.
Expertise, Experience & Analysis
The Polen Emerging Markets Growth Team is an experienced group where every member contributes as a research analyst. We collaborate to build group knowledge based on independent research and a flat structure where everyone has a voice. This best-ideas process is designed to uncover what we believe are unique, quality opportunities well-positioned for growth in their markets.
Located: London, UK
Head of Team: Damian Bird, Portfolio Manager & Analyst
Average Team Member Experience: 10 years
Our Investment Philosophy
Investing in emerging markets requires a long-term investment framework. It is over many years that billions will escape from poverty, cities will rise to the sky, and corporate champions will develop.
—Damian Bird, Head of Team, Portfolio Manager & Analyst
Polen Emerging Markets Growth Team Strategies
Our In-Depth Approach
Polen Emerging Markets Growth Stock Selection Process
Our Emerging Markets Growth Team selects what we believe are high quality companies with difficult-to-replicate competitive advantages. We invest independent of benchmark allocations, based on key indicators for long-term growth—we look for companies that, in our opinion, can earn excess returns not just today but for many years in the future. Using a business-owner’s mindset, we conduct deep on-the-ground due diligence and access new economies to find and evaluate attractive opportunities around the themes of domestic consumption growth, economic catch-up, and digitalization in an effort to drive growth and long-term staying power.
The Polen Global Emerging Markets Growth strategy typically holds 25 to 40 companies that the portfolio management team feels are the highest-quality growth names. Examples as of 6/30/2021 include:
Yandex is the leading internet search platform in Russia. Despite fierce competition from Google, it has built a dominant position in desktop and mobile search, controlling 60% of the Russian market. The core search business currently enjoys high margins and healthy cash flows and has sustained consistent double-digit growth over the last decade. We believe Yandex’s technological leadership is underpinned by its high-quality human capital, enabling the company to develop globally competitive products.
The largest retailer in Vietnam has taken full advantage of economic development in Vietnam. From its origins as a mobile phone retailer in 2004, the company has ridden the wave of GDP growth to become the largest electronics retailer in Vietnam with a 40-50% market share. In our view, penetration rates still leave ample room for growth both in their existing and new formats, which management has indicated it is working to identify. More recently, it has expanded its formats to include grocery retailing, and in a short time, has expanded to become Vietnam’s largest supermarket chain.
Colgate is the leading oral care company in India with a dominant market share in both toothpaste and toothbrushes. The company also produces a selection of personal care products under the Palmolive brand. Colgate India is a franchise with deep competitive moats, healthy margins, and a negative working capital cycle. In our opinion, category awareness and adoption remain the key drivers of growth, particularly in rural communities where consumers have yet to discover toothpaste as a product.
Recent Emerging Market Growth Perspectives
We are extremely pleased with the underlying business performance of our Portfolio companies in 2020, and we feel increasingly positive about their 2021 outlook.
Rather than concerning ourselves with market timing, we’re happy to add to our position and keep our eyes on the horizon.
We believe the opportunity for businesses that can provide consumer-relevant products and services in emerging markets is enormous and should persist for years, if not decades.
Polen Capital Management, LLC is an independent registered investment advisor.
The information is provided for illustrative purposes only. Opinions and views expressed constitute the judgment of Polen Capital as of the period indicated , may involve a number of assumptions and estimates which are not guaranteed, and are subject to change without update. Although the information and any opinions or views given have been obtained from or based on sources believed to be reliable, no warranty or representation is made as to their correctness, completeness or accuracy. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without update, including any forward-looking estimates or statements which are based on certain expectations and assumptions. The views and strategies described may not be suitable for all clients. This information does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction.
Holdings are subject to change. The holdings, as well as other data, are as of the period indicated and should not be considered as a recommendation to purchase, hold or sell any particular security. There is no assurance that any of the securities noted will remain in a portfolio at the time you review this information. Actual holding and percentage allocation in individual client portfolios may vary and are subject to change. The securities discussed do not necessarily represent the entire portfolio. It should not be assumed that any of the holdings discussed were or will prove to be profitable or that the investment recommendations or decisions we make in the future will be profitable. A list of all securities held in this portfolio in the prior year is available upon request. Past performance does not guarantee future results and profitable results cannot be guaranteed.