Equities

After a decade of underperformance, are emerging markets (EM) equities on the road to recovery? The potential for stronger earnings growth, particularly in Asia, along with a widening differential in emerging versus developed market real GDP growth could be a catalyst for the re-rating of global EM.

How much do listed companies contribute to emissions? We estimate they account for about 16.9 billion tons of greenhouse gases compared to a global total of 46.3 billion tons annually. These are needle-moving volumes. Investors can make a difference by working with management teams to encourage abatement plans.

High inflation creates the illusion of falling carbon intensity, a common measure used to track greenhouse gas emissions from portfolios. It is critical for investors who are targeting Paris Aligned reductions to adjust for this issue. By using alternatives to revenue-backed carbon intensity tracking metrics, we can help maintain data integrity and save years of progress.

The circular economy, popularized by expressions such as “zero waste”, “right to repair”, or “from farm to fork”, is rooted in the knowledge that resources are finite. Companies that manage to reduce their consumption of raw materials are likely to increase their profits and market share, which will ultimately benefit investors. Past examples of corporate successes based on the circular economy include the Italian Vespa scooter.

Discussing sustainability matters with Chinese companies is rewarding and challenging. Part of it is fact-finding, part of it is education. But investors need to tread with caution, and little extras such as talking Chinese help, says Hong Kong-based ESG analyst Gayle Chan. She also explains the approach of mtx Equities, citing a concrete example.

How can you find growth in times of panic? Difficult markets are not to be feared. Investors need an optimistic resolve and a clear roadmap: identify businesses with sustainable and predictable earnings streams, pricing power, and lower leverage, and avoid stocks trading at exorbitant multiples that are vulnerable to higher discount rates.

Like the end of a long evening of revelry, the decline in the fortunes of momentum growth and value companies leaves the Quality Growth investors, in our opinion – still standing. Companies with pricing power, low debt, and consistent earnings may be the slow but steady winners in the race to beat the market.

Bear markets do not send advance warnings. But investors can pay attention to red flags. Valuation multiples are well above the long-term average and consensus estimates are bullish on earnings growth. The good news is that investors can prepare for macro uncertainty and minimize capital loss.

As pressure has been building on Chinese technology stocks given growing regulatory threats, some of the key players in the Chinese internet sector are shifting to a more prudent strategy, pulling back to focus closer on the core business rather than investing in new growth areas.

Central banks must temper inflation at a time of geopolitical crisis, historically high valuations, slowing economic growth, declining equity markets, and a flattening yield curve – clearly not an environment for the faint of heart. Quality growth stocks, relative winners during times of persistent inflation, can be a portfolio stabilizer in challenging times.

What do Tiffany jewelry, Gerber baby food, and Milwaukee power tools have in common? They are all iconic American consumer brands owned by non-US based companies. In our view, US index funds and active managers that invest only in US-based companies are missing out on some American gems.

What does Russia’s invasion of Ukraine portend for China and Taiwan? How do you identify quality companies amid unpredictable regulatory and political environments? How should you consider absolute risks on a country level? Cheryl Gedvila, Client Portfolio Manager, addresses these difficult questions to help investors navigate markets today.

Unglamorous stock research, resisting the whims of the markets, and preparing for the worst can be downright boring. But it’s a great way to find quality international companies that can help reduce portfolio risk and improve downside protection – exciting results during these uncertain times.

Market sentiment reflects growth that will continue at past levels, yet economies and businesses globally are facing stiff headwinds – high government debt, rising inflation, and supply chain bottlenecks. As markets shrug off risks, expect volatility and a divergence in company performance in 2022.

The latest plot twist of the pandemic may have spooked markets in recent days, but the underlying sentiment is still one of worrying exuberance and investors are overlooking businesses in the consumer staples, health care and discretionary sectors that are still in the process of normalizing.

Local know-how goes a long way in emerging markets (EM). Regional e-commerce and consumer companies are increasing market share by adapting to local preferences. Some quality companies are benefiting from this and other EM trends, such as expanding demographics in the online gaming market and rising barriers to entry in semiconductors.

Portfolio Manager Chul Chang discusses valuations, opportunities in technology and industrials, rising debt levels and ESG considerations.

The nature we depend on is bleeding as natural habitat is cleared to support population growth, consumption and waste. Nature, society and the health of our portfolios are interlinked. This blog ties biodiversity hot spots to the impact of individual companies. Get ahead of risk and regulation.

Aided by social media and e-commerce, startup brands are increasingly taking share from legacy consumer packaged goods (CPG) companies. Meanwhile, retailers are launching far more sophisticated private-label brands. Which CPG companies are adapting to survive these threats? And do CPG stocks still play a role in portfolio construction?

To many, investing in sustainability is commonsense. To some, it is more of a bureaucratic waste of time with onerous new regulations. To us, it is clear that ESG is an integral part of evaluating business quality because, simply put, sustainability has a material impact on long-term value.

Recently Chinese regulators have become more assertive, causing concern among the international investor community. The key in helping investors navigate and, hopefully profit from these changes, is to understand the bigger picture and what the government is ultimately trying to achieve.

The Chinese government has recently instigated a far-reaching crackdown on privately-owned businesses in China. Chinese shares listed on foreign exchanges have reacted more negatively than A-shares to this increased government intervention. What risks does this pose to foreign investors and how can they prudently navigate the equity markets of China and Hong Kong?

Inflation is more than just an acceleration of prices; it is bad for economic growth and prosperity. We disagree with consensus that cyclical stocks –financials, industrials and commodities – are the best defense against inflation. Instead a portfolio of quality stocks can be the right approach.

10 million lab animals undergo tests with severe pain each year. Over time, companies have aligned with customers. The near-term exit for lab animals relies on regulators. A 2021 breakthrough in China shows progress. But the underlying driver is remarkable advances in technology. Management views and outlook in this blog.