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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
Buyside Digest is not affiliated with, and does not endorse, Sands Capital Emerging Markets Growth Fund. This analysis is provided for institutional research purposes only and is not investment advice.
"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."
Emerging Markets Growth outperformed the MSCI Emerging Markets Index in Q2 2025, driven primarily by security selection in Taiwan, India, and consumer discretionary sectors. The strategy delivered 12.9% net returns versus 12.0% for the benchmark. Top contributors included Taiwan Semiconductor, which reported strong AI-driven semiconductor demand and reaffirmed mid-40% compound annual growth targets for AI revenue through 2029. MercadoLibre and Sea demonstrated the strength of digital platforms in Latin America and Southeast Asia respectively, with Sea's gaming bookings up 51% year-over-year. Nu Holdings reinforced its position as a leading emerging market fintech franchise serving over 100 million customers. The portfolio remains diversified across end markets and geographies, with strengthened profitability metrics and balance sheet resilience. Key risks include economic uncertainty, regulatory pressures, and geopolitical tensions. Despite expecting volatility from AI developments and global economic factors, the managers maintain conviction in their high-conviction, long-term growth approach focused on businesses benefiting from digitalization, industry consolidation, and secular change across emerging markets.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
The manager demonstrates high conviction through concentrated positions in top holdings, clear articulation of investment theses, and specific long-term growth targets for key companies. The commitment to a high-conviction, long-term approach despite expected volatility indicates strong belief in the strategy.
Growth Outlook
The manager expresses cautious optimism about emerging markets, noting they have outperformed developed markets in four of the past five quarters and are delivering double-digit returns. However, this is tempered by expectations of volatility and economic uncertainty for the remainder of 2025.
Risk Appetite
The portfolio maintains a balanced approach with strategic position sizing and selective investments. The manager demonstrates measured risk appetite through diversification across end markets and geographies while maintaining conviction in high-quality growth businesses.
Capital Deployment
The manager completed purchases of MediaTek and Xiaomi while exiting several smaller positions including Avenue Supermarts, Kanzhun, Samsung SDI, and Tigermed. This suggests selective rebalancing rather than aggressive deployment or de-risking, with cash levels remaining at 2.1%.
Forward Guidance
The manager expects periods of volatility ahead due to AI developments, geopolitics, and global economic factors. While maintaining long-term conviction, the tone suggests cautious monitoring rather than aggressive deployment.
Language Signal
Language is predominantly positive when discussing portfolio companies and secular trends, with frequent use of terms like 'strong results,' 'outperformance,' and 'attractive opportunities.' However, this is balanced by acknowledgment of various risks and headwinds.
Perceived Risk
The manager acknowledges multiple risk factors including economic uncertainty, regulatory pressures, geopolitical tensions, and sector-specific challenges like EV adoption headwinds and biotech funding declines. The expectation of volatility from AI, geopolitics, and global economic developments indicates elevated risk awareness.
Opportunity Density
The manager identifies abundant opportunities across digitalization, industry consolidation, and AI-driven secular trends. Specific growth targets for portfolio companies and the identification of undervalued businesses suggest a rich opportunity set, though selectivity remains important.
Time Horizon
The strategy explicitly emphasizes a long-term investment horizon with expected holding periods of 5+ years and multi-year growth targets for key holdings. The focus on secular trends and compound growth over time indicates very patient capital deployment.
