| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 2.9% | - |
MCP Emerging Markets Fund delivered 2.9% returns in Q4 2025, outperforming the MSCI EM Mid Cap Index's 2.2% return, though the full year proved challenging due to style headwinds affecting quality-oriented mid-cap stocks. The strategy's emphasis on high-quality, under-researched companies faced significant underperformance as markets favored larger, liquid stocks and defensive sectors. Key contributors included EPAM Systems, Elite Material, and Raia Drogasil, while detractors included E Ink and Park Systems. The manager initiated positions in TCBS Tech, MakeMyTrip, and Karooooo, taking advantage of attractive valuations. Despite challenging conditions, portfolio fundamentals remain strong with 26% forward EPS CAGR expected and healthy balance sheets. The team believes current conditions present long-term opportunities as fundamentals reassert themselves, supported by emerging market valuation discounts of 38% on P/E basis versus developed markets and expected Federal Reserve rate cuts enhancing the outlook for EM assets.
The strategy focuses on delivering long-term performance by identifying high-quality, innovative, under-researched mid-cap compounders with strong fundamentals in emerging markets, where active management can add value through bottom-up research in less crowded areas of the market.
The manager believes periods following challenging years but characterized by resilient fundamentals and improving growth prospects are often when long-term opportunities in high-quality businesses begin to emerge. They expect scope for catch-up in valuations as macroeconomic pressures ease, providing support to the portfolio in the years ahead. The team remains confident in the opportunity set ahead and fully committed to their investment philosophy of delivering long-term performance through disciplined bottom-up stock selection.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 26 2026 | 2025 Q4 | EPAM, KARO, MELI, MMYT, TCOM | active management, Asia, emerging markets, mid cap, Quality, Recovery, technology, underperformance |
EPAM 2383 TT RADL3 BZ MMYT KARO |
The strategy focuses on high-quality, innovative, under-researched mid-cap compounders with strong fundamentals. Quality stocks suffered significant underperformance in 2025 due to style headwinds, with investors… |
| Oct 22 2025 | 2025 Q3 | - | emerging markets, FX, India, semiconductors, Taiwan | - | Managers argue EM quality lagged but is set up for recovery as tariff volatility fades, AI capex accelerates, and the Fed begins cutting rates. Taiwan/Korea… |
| Jul 21 2025 | 2025 Q2 | - | emerging markets, Engagement, Governance, sustainability | - | - |
| Oct 23 2024 | 2024 Q3 | 2360 TT, NVDA | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
E-commerceThe portfolio maintains exposure to e-commerce platforms and enablement technologies through holdings like Amazon and Shopify. The fund views e-commerce as benefiting from secular shifts in consumer behavior and continued digital commerce adoption across retail categories. |
Platforms Digital Retail Consumer Technology | |
QualityThe portfolio has shifted toward higher quality businesses with better profitability, lower leverage, and less volatile earnings. Quality stocks underperformed significantly in 2025, creating attractive entry points for value investors. The manager maintains price discipline while seeking quality companies trading at discounts to intrinsic value. |
Quality Profitability Leverage Earnings | |
SemiconductorsMACOM Technology Solutions rose nearly +40% as the company experienced broad-based demand, similar to many semiconductor companies in 2025. The team exited Astera Labs following industry conference presentations that suggested emerging competitive risks and concerns over single customer concentration, while initiating a position in Credo Technology for AI-connectivity exposure. |
Demand Competition Connectivity Customer Concentration | |
TravelRoyal Caribbean exemplifies the portfolio's focus on companies combining physical assets with technology innovation, using AI and technology for pricing optimization, packaging, promotions, and onboard customer experience delivery. |
Technology Pricing Experience Innovation Optimization | |
| 2025 Q3 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
Currencies |
||
Emerging marketsGlobal equities, especially those outside the U.S., powered equity returns. In emerging markets, shares of companies linked to commodities were the strongest performers as commodities rallied. Even after a strong year for international and emerging markets shares, we still see some of the best value in the world in these areas. |
International Commodities Non-US Best Value | |
| 2025 Q2 |
Emerging marketsGlobal equities, especially those outside the U.S., powered equity returns. In emerging markets, shares of companies linked to commodities were the strongest performers as commodities rallied. Even after a strong year for international and emerging markets shares, we still see some of the best value in the world in these areas. |
International Commodities Non-US Best Value |
Governance |
||
Sustainability2025 was one of the three hottest years ever recorded with climate-driven disasters causing significant costs. Despite political challenges, 84% of large companies maintained climate commitments and investor sentiment remained resilient with 70% committed to sustainability long-term. |
Climate Commitments Resilient Temperature Disasters |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 26, 2026 | Fund Letters | Carlos Hardenberg | EPAM | EPAM Systems Inc. | Information Technology | IT Services & Consulting | Bull | New York Stock Exchange | AI, buybacks, Digital transformation, IT services, Software | Login |
| Jan 26, 2026 | Fund Letters | Carlos Hardenberg | 2383 TT | Elite Material Co Ltd | Information Technology | Electronic Components | Bull | New York Stock Exchange | AI hardware, data centers, materials, Pcbs, semiconductors | Login |
| Jan 26, 2026 | Fund Letters | Carlos Hardenberg | RADL3 BZ | Raia Drogasil SA | Consumer Staples | Retail Pharmacies | Bull | Brasil Bolsa Balcão | Brazil, Glp1, Healthcare Consumption, Pharmacies, retail | Login |
| Jan 26, 2026 | Fund Letters | Carlos Hardenberg | MMYT | MakeMyTrip Ltd | Consumer Discretionary | Online Travel Agencies | Bull | NASDAQ | Consumer Growth, India, Online Travel, operating leverage, Platforms | Login |
| Jan 26, 2026 | Fund Letters | Carlos Hardenberg | KARO | Karooooo Ltd | Information Technology | Application Software | Bull | NASDAQ | ARPU, Fleet Management, SaaS, Subscriptions, Telematics | Login |
| TICKER | COMMENTARY |
|---|---|
| EPAM | I continue to believe that DAVA is undervalued relative to peers who face similar AI threats as DAVA, such as EPAM. |
| KARO | MEMF initiated a position in Karooooo (Cartrack), a high-quality, recurring-revenue telematics platform with strong structural growth drivers and company-specific execution catalysts. Industry demand is supported by fleet digitalisation to manage rising fuel, labour and maintenance costs, alongside increasing regulatory adoption across multiple regions. Cartrack's vertically integrated model underpins high customer stickiness (c.95%), high recurring subscription quality, and attractive unit economics. |
| MELI | E-commerce Volatility: turbulence in our e-commerce portfolio companies, Sea Ltd (Southeast Asia) and MercadoLibre (Latin America), amidst aggressive price wars. |
| MMYT | MakeMyTrip, India's leading online travel booking portal, has been a much better investment than Britannia Industries, India's leading biscuit brand, over the past three years. |
| TCOM | Trip.com was mentioned as a larger position that contributed little despite positive operating progress, representing opportunity cost. |
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