Maple-Brown Abbott fills emerging markets gap

Maple Brown Abbott has officially launched its emerging markets strategy with the Maple-Brown Abbott Global Emerging Markets Equity Fund, an actively managed fund which invests in a concentrated portfolio of 30 to 40 stocks across global emerging and frontier markets.

Maple-Brown Abbott hired John Moorhead as head of global emerging markets from the UK in late 2021 to spearhead the strategy. He has been running the fund with some internal and shareholder money since June last year and is now making the strategy more available to institutional and retail funds.

Maple-Brown Abbott is already well known for its Australian, Asian and global strategies but emerging markets is new.

"What comes with that is opening up a whole heap of new of countries...It's opening up Turkey, South Africa and Poland, through to Brazil and Mexico and we wanted to take a considered approach and make sure we got it right before we went out with a hard launch," Moorhead says.

"[Launching the strategy] made a lot of sense to me and that was one of the appeals of making the move was that they had this established team. It's a good-sized team."

Local managers of global funds

Relocating from London to Sydney to manage the strategy, Moorhead says it can be useful being in a 'neutral' country to those in the portfolio.

"It helps to get away from biases towards investing in that particular country or particular region when you're outside the noise," he says.

The Australian time zone is also helpful for some countries and he strongly believes that global strategies can be run successfully from Australia.

"You can do global from Australia. And it seems to be there's certainly in the community here a growing focus on global investors."

Post Covid, technology changes have assisted in helping virtual company meetings, but Moorhead says there is also no replacement for visiting companies on the ground which he, and the other portfolio managers, are now starting to more frequently.

"I was just in Saudi Arabia and Dubai myself for an in-person conference...To compare Riyadh to Dubai on the ground, it's so hard to do that from a zoom call."

Market outlook

The fund takes a 'benchmark unaware' approach and looks for companies most likely to benefit from cyclical and structural change.

Moorhead acknowledges that the fund launched into a volatile market, especially with its heavy exposure to China, but it has still been able to find pockets of opportunity.

"One of the big beliefs that I have is you need to focus on the direction of change, and that's like structural change and cyclical change. And one of the big changes and the big themes that I see across emerging markets for the next decade will be deglobalization, friend-shoring and nearshoring. And Mexico is a clear beneficiary of that," he says.

On this theme, the fund holds Mexican warehouse developer Vesta and operator of 12 airports in Mexico Grupo Aeroportuario, two stocks which made positive contributions to the fund's performance in February.

As a relatively new strategy, the fund is running with $11 million (as at February 2023) but Moorhead says they are seeing increasing interest and RFPs. For retail investors the fund has a minimum investment of $20,000 and management fees of 0.95 per cent of the net asset value of the fund.

"I think we've priced it competitively, recognising that when you're new to the market you need to come in with a competitive offer," Moorhead says.