As markets become more discrete, we expect a return to fundamentals to reward our investment style
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 (as of 9-30-2022)
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
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 09/30/2022 include:
Karooooo is the holding company of Cartrack. Cartrack is the dominant telematics software and equipment provider in South Africa, with an expanding presence in Southeast Asia. Its software helps drive efficiencies across fuel, maintenance, and insurance costs for corporate customers. With its SaaS (Software as a Service) operating model, margins and recurring cash flows are high, enabling self-funding growth and +30% returns on capital. We believe international expansion and the continued consolidation of a highly fragmented industry will drive future growth.
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 (Gross Domestic Product) 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.
HDFC Bank is the leading private sector bank in India. It is predominantly a retail bank with over 6,000 branches that reach more than 70 million customers. It also operates a wholesale banking business providing working capital loans and other services to Indian corporates. The bank was founded in 1994 as a subsidiary of HDFC, the dominant mortgage financing company in India. HDFC Bank has been one of the best compounders in the Indian market thanks to its strong culture of risk management and competitive funding advantage.
Recent Emerging Market Growth Perspectives
A Collaborative & Research Driven Team
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.
Absolute Return: is the percent amount that an asset rises or declines in value in a given period. Active Share: is a measure of the percentage of stock holdings in a manager’s portfolio that differs from the benchmark index. Excess Return: returns achieved above and beyond the return of a benchmark.