| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 5.8% | -5.1% | -5.1% |
Emerging Markets Growth underperformed in Q1 2026 as AI infrastructure gains were overwhelmed by select e-commerce detractors and geopolitical pressures. The portfolio benefited from strong AI demand driving semiconductor performance, with TSMC raising AI revenue growth expectations to 55% annually and memory companies seeing 40% DRAM price increases. However, e-commerce platforms faced headwinds from TikTok competition and AI disruption concerns, while the Iran conflict prompted risk reduction in India and Korea exposures. The manager continued expanding AI infrastructure through new positions in chip design, equipment, and power solutions while trimming geopolitical risks. Portfolio valuation declined to 14x forward earnings, the narrowest premium to benchmark since inception, while earnings estimates increased. Despite near-term volatility from short-term narratives, the manager expects 29% annualized earnings growth with historically low valuations to create attractive five-year setup for concentrated portfolio of 43 businesses with sustainable competitive advantages.
Selectively own premier emerging market growth businesses benefiting from secular change including digitalization, industry consolidation, and life sciences innovation, with focus on AI infrastructure expansion while managing geopolitical risks.
Short-term narratives are driving market behavior but their economic impact will unfold over different time horizons. The manager takes comfort in knowing what they own through a business owner's approach, expecting 29% annualized earnings growth coupled with the lowest absolute and relative valuation in strategy's history presents an attractive setup for the next five years.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 25 2026 | 2026 Q1 | 000660 KS, 005930 KS, 0700.HK, 300750.SZ, ASML, BAJFINANCE.NS, HDFCBANK.NS, MELI, NU, SE, TSM | AI, Asia, emerging markets, energy, Geopolitical, growth, semiconductors, technology | - | AI infrastructure drove strong gains but e-commerce headwinds and Iran conflict risks caused Q1 underperformance. Portfolio expanded AI exposure through new semiconductor equipment and power solution positions while trimming India and Korea. Valuation at historic lows with 29% expected earnings growth creates attractive five-year setup despite near-term geopolitical volatility. |
| Jan 22 2026 | 2025 Q4 | 000660.KS, 005930.KS, 0700.HK, 1211.HK, 122870.KS, 1299.HK, 1810.HK, 2269.HK, 2454.TW, 300750.SZ, 3690.HK, 4966.TW, 500570.BO, 532978.BO, APHS.NS, ASML, BABA, BBCA.JK, CPNG, DIDI, DNP.WA, FPT.VN, FTA, GLOB, GRAB, HDB, HDFCLIFE.NS, HTHT, ICT.PS, KSPI.L, MELI, NU, PHNX.NS, RADL3.SA, SE, TSM, WEGE3.SA, WMMVY | AI, China, E-Commerce, emerging markets, growth, Memory Chips, semiconductors, technology | - | Emerging Markets Growth delivered strong 21.6% absolute returns in 2025 but lagged benchmarks due to multiple compression in quality holdings. AI-driven semiconductor strength offset ecommerce headwinds from Sea, MercadoLibre, and Coupang. Portfolio positioned for secular digitalization and AI trends with historically attractive valuations and mid-20% expected earnings growth creating compelling long-term opportunity despite near-term performance challenges. |
| Oct 20 2025 | 2025 Q3 | 000660.KS, 005930.KS, 0700.HK, 1211.HK, 1299.HK, 1810.HK, 2020.HK, 300750.SZ, APOLLOHOSP.NS, ASML, BAJFINANCE.NS, BHARTIARTL.NS, COSMAX.KS, CPNG, HDFCBANK.NS, MELI, NU, SE, TSM | AI, China, E-Commerce, emerging markets, Fintech, growth, India, semiconductors | - | Emerging Markets Growth underperformed in Q3 2025 due to reversals in strong first-half performers and country positioning effects. The portfolio added semiconductor exposure through Samsung Electronics and SK hynix while maintaining conviction in AI infrastructure, fintech growth, and China's innovation transition. Despite volatility expectations, the diversified portfolio trades at attractive valuations with improved earnings visibility. |
| Jul 21 2025 | 2025 Q2 | 0700.HK, 1211.HK, 1299.HK, 1810.HK, 2020.HK, 2454.TW, APOLLOHOSP.NS, ASML, BAJFINANCE.NS, BRITANNIA.NS, CPNG, HDFC.NS, HDFCBANK.NS, MELI, NU, RELIANCE.NS, SE, TITAN.NS, TSM, WALMEX.MX | AI, E-Commerce, emerging markets, Fintech, gaming, growth, semiconductors, technology | - | Emerging Markets Growth outperformed in Q2 2025 with 12.9% returns, led by Taiwan Semiconductor's AI-driven growth and strong digital platform performance from MercadoLibre, Sea, and Nu Holdings. The portfolio benefits from secular trends in digitalization and industry consolidation across emerging markets, with improved fundamentals despite expected volatility from AI developments and geopolitical factors. |
| Mar 31 2025 | 2025 Q1 | 0700.HK, 1211.HK, 1299.HK, 2020.HK, 2330.TW, APOLLOHOSP.NS, ASML, BAJFINANCE.NS, BRITANNIA.NS, CPNG, GLOB, GRAB, HDFCBANK.NS, MELI, NU, RELIANCE.NS, SE, WEGE3.SA | AI, China, E-Commerce, emerging markets, growth, India, semiconductors, technology | - | Emerging Markets Growth selectively owns premier growth businesses benefiting from digitalization and industry formalization. Despite growth stock headwinds, the strategy outperformed the EM Growth Index. Key contributors included Bajaj Finance, Sea, and Tencent. The portfolio has narrowed its China underweight while remaining cautious about trade tensions and recession risks from escalating tariffs. |
| Dec 31 2024 | 2024 Q4 | 006400.KS, 0700.HK, 1120.SR, 1179.HK, 1211.HK, 1299.HK, 1398.HK, 2020.HK, 300750.SZ, 6862.HK, APHS.NS, ASIANPAINT.NS, ASML, BABA, BAF.NS, BBCA.JK, BBRI.JK, BRIT.NS, CPNG, DMART.NS, DNP.WA, FPT.VN, GLOB, GRAB, HDB, HDFCLIFE.NS, ICT.PS, KSPI.L, MELI, NU, RADL3.SA, RELIANCE.NS, RENT3.SA, SE, TCS.NS, TSM, TTAN.NS, WEGE3.SA, XP | AI, Banking, China, Electric Vehicles, emerging markets, growth, semiconductors, technology | - | Sands Capital's emerging markets strategy delivered 3.1% returns in 2024 despite Q4 weakness, with portfolio companies showing 147% earnings growth over three years while valuations compressed. The concentrated 43-business portfolio targets digitalization, AI, and energy transition themes across Asia and Latin America, positioning for fundamental-driven recovery as market leadership broadens beyond mega-caps. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIAI infrastructure drove strong performance with accelerating demand for AI accelerators, memory chips, and data center equipment. TSMC raised AI revenue growth expectations to 55% annually through 2029, while memory companies benefited from AI-driven supply-demand imbalances requiring 1-2 zettabytes of fast memory. |
Infrastructure Accelerators Memory Data Centers Compute |
SemiconductorsSemiconductor businesses led index performance with strong pricing dynamics in memory markets. DRAM prices rose 40% quarter-over-quarter while NAND increased mid-20% range, driven by AI demand and constrained supply growth. |
Memory DRAM NAND Pricing Supply | |
E-commerceE-commerce platforms faced headwinds from competition concerns with TikTok and AI disruption fears. Sea declined on investment cycle concerns while MercadoLibre's strong 45% revenue growth was overshadowed by margin uncertainty and AI disruption debates. |
Platforms Competition TikTok Margins Disruption | |
Energy TransitionCATL demonstrated strong performance in electric vehicle batteries and energy storage, maintaining market leadership with 40% volume growth and 100% capacity utilization. The Iran conflict boosted clean energy expectations. |
Batteries Electric Vehicles Storage Leadership | |
IndiaIndia exposure was trimmed due to energy shock risks from Iran conflict, given deep economic linkages through energy imports, trade, and remittances. Banking sector faced leadership uncertainty at HDFC Bank and elevated provisions at Bajaj Finance. |
Energy Banking Leadership Provisions | |
ChinaChinese technology companies faced pressure from AI investment cycles and competitive concerns. Tencent's AI investments will more than double in 2026, potentially causing profit growth to lag revenue growth, while domestic semiconductor equipment providers benefit from substitution trends. |
Technology Investment Substitution Equipment | |
| 2025 Q4 |
AIManager believes AI revolution is fundamentally different from dot-com bubble, driven by current compute demand rather than future applications. Views infrastructure buildout as most secure part of AI food chain. Expects continued volatility but remains bullish on long-term prospects. |
Artificial Intelligence Data Centers Compute Infrastructure GPUs |
Data CentersThree mega-trends driving insatiable demand for accelerated computing: transition from CPU to GPU infrastructure, replacement of recommender systems, and future robotics/digital agents. Current demand exceeds available compute capacity unlike telecom overbuild in 2000. |
GPU Infrastructure Hyperscalers Cloud Servers | |
SemiconductorsContinued investment in Nvidia and ASML reflects belief that infrastructure buildout is most secure part of AI food chain. Added Micron as new investment. Views semiconductor equipment and memory as beneficiaries of AI revolution. |
Nvidia ASML Memory Equipment Foundries | |
Enterprise SoftwareConsolidating exposure around platform companies ServiceNow and Salesforce while eliminating Adobe. Believes platforms connecting workflows across organizations are better positioned than best-of-breed apps against AI disruption threats. |
SaaS Platforms Workflow Automation CRM | |
Trade PolicyExpects tariffs to remain central investment topic in early 2026 due to potential Supreme Court ruling on Trump tariffs. Notes over $200B collected in tariffs over past year. Believes similar tariffs would be reimposed under different legal authority if current ones invalidated. |
Tariffs Trade IEEPA Supreme Court Policy | |
| 2025 Q3 |
AIArtificial intelligence is expanding growth runways and reinforcing competitive advantages across business lines. AI is improving user experience in gaming through more responsive in-game bots and accelerating design workflows. In advertising, AI enables more targeted placements, higher click-through rates, and more closed-loop transactions. The portfolio includes businesses positioned to benefit from AI infrastructure buildout and implementation. |
Infrastructure Gaming Advertising Implementation Competitive |
SemiconductorsThe portfolio maintains meaningful semiconductor exposure along the AI infrastructure value chain, including baseboard management controllers, system-on-chip solutions, and high-bandwidth memory. Taiwan Semiconductor benefits from strong AI-related demand and is expanding CoWoS capacity. SK hynix leads in high-bandwidth memory essential for AI servers and GPUs. |
Memory Infrastructure Manufacturing Equipment Foundries | |
E-commerceEcommerce platforms continue to show strong growth momentum despite competitive pressures. Sea's Brazil ecommerce business has been profitable since 2024 and is expected to grow over 25 percent annually. MercadoLibre announced new shipping policies to expand into lower-income segments by leveraging logistics infrastructure. Ecommerce penetration in Brazil remains in the mid-teens, leaving significant opportunity. |
Platforms Brazil Logistics Penetration Growth | |
FintechDigital financial services platforms show strong momentum with credit reacceleration trends. Nu Holdings' credit portfolio grew 40 percent year-over-year with strength across credit cards, unsecured loans, and secured loans. The business in Mexico continues to ramp up with loan balances expanding rapidly. Low loan-to-deposit ratios leave room for balance sheet optimization. |
Digital Credit Mexico Banking Optimization | |
ChinaChina's innovation economy is transitioning from potential to progress with clearer policy signals, fast-moving automation, and evolving consumer behavior reshaping investor sentiment. The portfolio is narrowing its China underweight. Optimism stems from signs of improved U.S. relations and domestic efforts to curb involutionary competition to reduce deflationary pricing and improve industrial margins. |
Innovation Policy Automation Relations Competition | |
IndiaIndia remains a key focus despite underperformance, with the portfolio maintaining an overweight position. Policymakers have taken steps to boost consumer spending through interest rate cuts, lower reserve requirements, and tax relief. The telecom sector benefits from expanding addressable markets, greater pricing power, and ongoing premiumization as rising smartphone penetration drives higher data consumption. |
Telecom Consumer Smartphone Pricing Penetration | |
| 2025 Q2 |
AIAI infrastructure buildout continues with sustained momentum, particularly in semiconductor demand. Taiwan Semiconductor reaffirmed its long-term goal to grow AI-related revenue at a mid-40 percent compound annual rate through 2029. AI is accelerating a winner-takes-most dynamic, benefiting companies with scale, differentiated offerings, and the ability to productize innovation. |
Semiconductors Infrastructure Revenue Growth Competitive Advantage Scale |
E-commerceStrong performance across Latin American and Southeast Asian e-commerce platforms. MercadoLibre delivered strong results despite representing less than 5 percent of the region's total retail market. Sea's ecommerce margins expanded on lower logistics costs and rising ad revenue, with Shopee Brazil growing market share while delivering its third consecutive profitable quarter. |
Market Share Margins Logistics Advertising Profitability | |
SemiconductorsLeading-edge logic chip demand remains strong, driven by AI applications. Taiwan Semiconductor reported strong quarterly results with management reiterating 2025 revenue growth target in the mid-20 percent range. The company plans to double capacity for CoWoS packaging this year, noting that demand continues to exceed supply and capacity remains fully booked. |
Logic Chips Capacity Supply Demand Packaging Revenue Growth | |
GamingSea's gaming segment showed strong recovery with bookings up 51 percent year-over-year following Free Fire's successful Naruto Shippuden campaign. Video impressions exceeded 300 million in less than 5 months, marking the game's top-rated collaboration to date. |
Mobile Gaming Bookings Collaborations User Engagement Revenue Growth | |
FintechDigital financial services platforms continue strong growth across emerging markets. Nu Holdings reinforced its position as one of the strongest emerging market franchises, with re-acceleration in PIX financing origination and progress toward breakeven in Mexico. The company serves more than 100 million customers across Latin America. |
Digital Banking Customer Growth Financing Market Expansion Profitability | |
Electric VehiclesEV adoption faces headwinds with U.S. penetration stalled around 10 percent and Europe's pullback in incentives slowing market growth. Samsung SDI faces challenges as automakers increasingly shift away from Korean battery suppliers in favor of more affordable solutions from Chinese competitors like CATL. |
Adoption Incentives Battery Supply Competition Market Share | |
| 2025 Q1 |
ChinaSince the beginning of 2024, we have narrowed our underweight to China relative to the MSCI EM. While we remain cautious about China's long-term structural challenges and ongoing geopolitical tensions with the United States, we also see a select group of exceptional growth businesses in the country. Our views are shaped by on-the-ground research with three research trips to China and Hong Kong in the first quarter of 2025. |
Technology Innovation DeepSeek Robotics AI |
AIThe Chinese government has publicly backed the development of its domestic AI ecosystem, and we expect Tencent to be a key beneficiary. Tencent established its AI lab in 2016 and is developing a proprietary model called Hunyuan. While the rise of models like DeepSeek has raised concerns about demand, we believe greater AI accessibility will drive an increased need for advanced semiconductor manufacturing. |
DeepSeek Semiconductors Innovation Technology | |
E-commerceMercadoLibre is the largest ecommerce and fintech ecosystem in Latin America by market share. The business delivered a strong fourth quarter in 2024, with operating income exceeding consensus estimates by 37 percent. Sea operates leading platforms for video games, ecommerce, and digital financial services, with Shopee growing gross merchandise volume 24 percent year-over-year. |
Fintech Digital Marketplaces Growth | |
Electric VehiclesBYD is the world's largest manufacturer of new energy vehicles by volume. BYD reported $107 billion in 2024 revenue, up 29 percent year-over-year, surpassing Tesla and reinforcing its leadership in electric vehicles. The company unveiled key innovations, including a Level 2 advanced driver-assistance system available across all models at no cost and battery technology that enables 400 kilometers of range in five minutes. |
NEV Battery Innovation Manufacturing | |
IndiaIndia and Taiwan were the strategy's top relative contributors from a country perspective. Bajaj Finance reported strong quarterly results, with loan growth exceeding its long-term target of 25 percent. Apollo Hospitals operates one of the largest private hospital networks in Asia and the largest pharmacy chain in India by store count. Phoenix Mills benefits from the ongoing formalization of India's retail sector. |
Digitalization Healthcare Finance Retail | |
SemiconductorsTaiwan Semiconductor is the world's largest producer of leading-edge logic chips by market share. Revenue from AI accelerators more than tripled in 2024, accounting for 15 percent of total revenue. Management expects this figure to double again in 2025 and to grow at a mid-40 percent annual rate over the next five years. ASPEED Technology is the world's largest designer of BMC chips by market share. |
AI Manufacturing Technology Growth | |
| 2024 Q4 |
AIAI has rapidly evolved from a conceptual novelty to a transformative tool since ChatGPT's launch in late 2022. Portfolio companies like AppLovin and ServiceNow are leveraging AI to enhance their core offerings, with AppLovin building an AI advertising placement platform and ServiceNow using AI to automate repetitive tasks and improve decision making. |
Artificial Intelligence Automation Advertising Enterprise Software Machine Learning |
Electric VehiclesThe shift from internal combustion engines to new energy vehicles is accelerating in China, with NEVs surpassing 50 percent of monthly new car sales for the first time in July 2024. BYD is positioned as the clearest beneficiary of this transition, expected to grow market share from 15 percent in 2024 to 25 percent by decade end. |
NEV Battery China Automotive Clean Transportation | |
E-commerceDigital economy expansion continues globally with businesses finding new ways to seize opportunities. Companies like Grab Holdings have emerged as leading super apps in Southeast Asia, while Full Truck Alliance has become the Uber for trucks in China, streamlining freight logistics through two-sided marketplaces. |
Digital Platforms Marketplaces Logistics Southeast Asia China | |
Energy TransitionPortfolio companies are pioneering clean transportation and renewable energy solutions globally. BYD and Contemporary Amperex Technology are leading in electric vehicles and lithium batteries, while companies like WEG create greener solutions in manufacturing and power generation. |
Clean Energy Renewable Sustainability Battery Technology Green Infrastructure | |
SemiconductorsTaiwan Semiconductor continues to showcase strong demand for AI chips with revenue increasing 29 percent and earnings rising 54 percent year-over-year. The company's competitive position in leading-edge chip fabrication has improved, with higher demand for next-generation 2nm nodes and potential market share gains from Intel and Samsung struggles. |
AI Chips Foundry Leading Edge Manufacturing Technology |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| TSM | TSMC's latest results highlighted accelerating Al demand and reinforced the company's position as a primary beneficiary of that trend. The update included two new datapoints that strengthened our outlook for Al accelerator demand. First, TSMC Chairman C.C. Wei said he personally spoke with the company's largest hyperscaler Al customers and concluded that their requests for additional capacity were supported by end demand. Given TSMC's historically conservative posture, we view this as a meaningful signal. Second, the company reinforced that confidence with a materially higher capital expenditure plan of $54 billion for 2026, well above consensus estimates of $47.8 billion, to support expected Al-driven demand. TSMC also reported results and issued guidance that exceeded our expectations and those of consensus. Management now expects Al-related revenue to grow at a 55 percent annualized rate through 2029, up from 45 percent previously, driven by both higher volumes and improved pricing. |
| 005930.KS | Samsung and SK hynix benefited during the quarter from a continued mismatch between supply and demand for memory chips, supporting significant pricing increases. Samsung's HBM4 has completed NVIDIA qualification, strengthening its role as a second source. Both businesses are investing to expand supply while maintaining technology leadership, particularly in advanced packaging and memory performance. |
| 000660.KS | Samsung and SK hynix benefited during the quarter from a continued mismatch between supply and demand for memory chips, supporting significant pricing increases. SK hynix continues to lead in HBM and reported accelerating next-generation production. The business also confirmed its HBM4 is in mass production and noted it has turned away some 2026 demand due to capacity constraints. |
| ASML | ASML Holding is the world's leading provider of semiconductor lithography equipment by market share. Shares rose alongside AI infrastructure businesses, reflecting strong demand for AI compute and the critical role ASML's tools play in enabling leading-edge chip fabrication, including advanced memory and logic production. The company reported a record €13.2 billion in fourth-quarter 2025 bookings, well ahead of expectations, including €7.4 billion from extreme ultraviolet (EUV) systems tied to AI-driven demand. |
| 300750.SZ | CATL is the world's largest manufacturer of lithium-ion batteries for electric vehicles and energy storage systems by market share. The business delivered strong results during the quarter, reinforcing our long-term thesis, and shares rose later in the period amid the Iran conflict, reflecting investor expectations of stronger long-term demand for clean energy. CATL has led market share in electric vehicles and energy storage systems for the past nine and five years, respectively, and continued to gain share in 2025. Volumes grew 40 percent year over year in 2025's fourth quarter, exceeding our expectations, while capacity utilization reached about 100 percent, indicating tight supply conditions. |
| SE | Sea is an internet business in Southeast Asia that operates leading platforms in video games (Garena), ecommerce (Shopee), and digital financial services (Monee). Shares have come under pressure in recent months due to earnings revisions tied to incremental investment in the ecosystem, competition concerns with TikTok, and perceived AI disintermediation risk. We believe Shopee's ongoing investments reflect a proactive effort to strengthen competitive advantages. |
| 0700.HK | Tencent is China's largest technology company by market capitalization. Shares came under pressure after management announced that AI investments will more than double in 2026, which could result in profit growth lagging revenue growth. Further downside revisions are possible if the investment cycle extends into 2027 and beyond. The company is also increasing capital expenditures and reducing share repurchases. |
| BAJFINANCE.NS | Bajaj Finance is a leading Indian nonbank financial services company. Shares declined alongside Indian equities and following quarterly results affected by several one-off factors, including new provisioning standards and a labor code-related charge. Elevated provisions weighed on reported earnings, but we view this as a proactive step to strengthen the balance sheet rather than a signal of underlying credit stress. |
| HDFCBANK.NS | HDFC Bank is India's largest private-sector bank by market share. Shares declined amid broader weakness in Indian equities, driven in part by the global energy shock. Leadership uncertainty also weighed on sentiment. The resignation of the independent chair in March, attributed to a difference in ideologies, appears linked to internal disagreements following the merger. |
| MELI | MercadoLibre is the largest ecommerce and fintech ecosystem in Latin America by market share. Growth remains strong, with revenue increasing 45 percent year over year in the most recent quarter, supported by gross merchandise volume growth in Brazil of 35 percent, excluding foreign exchange impacts. This exceeded expectations and accelerated from the prior quarter. These results suggest that ongoing investments are strengthening competitive positioning and expanding the addressable market. |
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