2Q2020 – Global Emerging Markets Growth Commentary

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.

  • Emerging markets equity indices roared back in the second quarter, erasing nearly all losses of the first quarter. Markets seem happy to look past the short term medical and economic headwinds the pandemic is posing, and instead focus on the recovery ahead.
  • The Polen Global Emerging Markets Growth Composite Portfolio (the “Portfolio”) performed in line with the market returning 17.78% gross of fees in the quarter versus the MSCI Emerging Markets Index (the “Index”) return of 18.09%. Almost every holding recorded positive performance, reflecting the breadth and scale of the rally. For the year-to-date period, the Portfolio is down -6.01% gross of fees versus -9.77% for the Index.
  • While confidence in the long-term outlook seems to have returned, we recognize that emerging markets face very real challenges in the coming months. That said, we believe rising emerging market populations entering the middle class should remain an enormous and attractive opportunity for businesses for years, if not decades.
  • Regardless of how the coming quarters play out, our investment strategy remains unchanged. We seek to own approximately 30 of the highest-quality businesses in emerging markets and believe that, over time, they can outpace their competitors and command above-average share of rapidly growing industry profit pools.

Read the full commentary here →