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The year 2023 turned out to be fairly pedestrian in terms of emerging markets’ performance. The asset class was weighed down by China, which recorded its third consecutive year of negative returns.

Albert Einstein famously said, “Not everything that can be counted counts and not everything that counts can be counted.” This holds true in many situations, but we think it is especially true when it comes to risk management.

In almost every meeting that we have with management teams, we will ask about incentivisation. In our view, it is an important question and the answer can be highly revealing about an organisation’s culture and behaviour.

As long-term, bottom-up investors, our starting point for finding suitable investments is to seek out companies that benefit from structural tailwinds and have clearly-defined competitive advantages.

Since our last update, the initial public offering (IPO) frenzy we have observed for the past 12-18 months has continued unabated. This is especially true in India where there have been around 100 IPOs so far this year.

Since our last update, global markets have not been short of action and the manic behaviour characterising today’s markets has taken investors on another rollercoaster ride. While not quite comparable to the market movements seen during the dark days of March 2020, the recent correction — especially in China-related companies — has been notable.

At FSSA Investment Managers, we believe that meeting management teams is crucial in assessing the quality of a company.

As questions about the waning of US exceptionalism are taking hold, institutional investors are increasingly looking to diversify their equity holdings.

Over the past few years, global emerging market (GEM) investors have dealt with a series of challenges, including a surging pandemic, local lockdowns and widespread travel restrictions.

Our investment philosophy focuses on owning high-quality businesses in emerging markets for long-term wealth creation. We target "structural compounders" with strong management, sustainable models, and competitive advantages.

I started my career more than 18 years ago as a developed markets consumer analyst. It was a great introduction to investing – the consumer sector is extremely broad so I was able to gain experience across many sub-industries and look at a wide variety of companies.

At FSSA Investment Managers, we take a patient, long-term approach when investing in global emerging markets, with a concentrated portfolio of high- quality companies. We examine why this philosophy has endured for the past quarter-century.

Investment management is an industry where in the short run there is usually little relationship between process and outcome. In the long run, however, the link is very strong.

At its core, our investment philosophy endeavors to identify quality management teams that run businesses able to compound earnings or free-cash flows at attractive rates for long periods of time.

Many fund managers see high trading volumes and rapid portfolio turnover as evidence of constant re-evaluation and attention to detail. But the FSSA Global Emerging Markets (GEM) strategy favors a more patient, long-term approach, only investing in companies where we have high conviction in their prospects.

In the FSSA GEM Focus strategy we own high-quality businesses which have competitive advantages such as strong brands, distribution advantages, cost leadership, or simply providing a service/product that customers cannot live without. Historically, this has given them pricing power and the ability to preserve margins despite adverse headwinds.

Read the latest news and investment insights from FSSAIM's leading investment experts. We're specialists in APAC and Global Emerging Markets investments.

The American economist Frank Knight once observed that uncertainty, unlike risk, cannot be quantified or predicted.

The global economy is increasingly being driven by emerging markets growth. With our long-established investment process and decades of investing in the region, we have found plenty of high-quality companies in emerging markets – but taking an active approach is key.

FSSA Investment Managers has been investing in Asia and global emerging markets for three decades.

One of the true competitive advantages we believe we have at FSSA is a genuine long-term investment horizon. For us, investing is not about trying to predict which stocks will rise or fall next month or quarter; rather, it is a non-speculative activity aimed at participating in the long-term value creation we believe the best companies can generate.

As investors focused on quality, one can easily “fall in love” with an investment and be too forgiving in certain situations, potentially missing important warning signs or sell signals. One question that we frequently get relates to a common behavioural bias for quality investors: how do we balance admiration for a company without becoming too complacent?

Investors sometimes fixate on macro movements such as short-term economic trends such as inflation paths and interest-rate movements, but this is not the FSSA Investment Managers way. Our strategy is driven by long-term growth trends in emerging markets and the investment opportunities they create.

Discover our range of APAC & Emerging Markets (EM) funds today. FSSAIM are investment specialists for China, India and emerging market equities.

At FSSA Investment Managers, we invest in businesses we expect to be part of our portfolio for decades to come. That’s why we put such a premium on the quality of management teams, choosing leaders who we believe have the skills to build strong franchises and deliver long-term growth.

High-turnover, high-volume strategies might rely on algorithms and AI for their trading ideas. But at FSSA Investment Managers, we believe the key to building conviction in our investment ideas is having face-to-face conversations with the people and companies we invest in.

In the 1960s, the average holding period for a stock was over eight years. Today, it’s less than six months. But with less time in the market, the narrow band of return dispersion means that many investors end up tracking the index, not beating it.

News about US reciprocal tariffs have rocked global markets, as President Trump announced sweeping import taxes that were far higher and affected a much broader swathe of countries than expected.

Learn about FSSAIM fund prices and keep track of performance with our comprehensive document library.

At FSSA Investment Managers we seek to invest in quality companies and hold them for the long term. To us, “quality” and “ESG” are synonymous; therefore, we have embedded ESG analysis within the team and have integrated it into our fundamental company research.

Uncover the untapped potential of Asian markets and emerging economies, as the article explores rebound opportunities and strategic moves in the FSSA Asian Growth Strategy portfolio.