Portfolio Manager Peter Lampert dives into the world of emerging markets, sharing what's changed for the portfolio since last year, insights on where we're seeing new opportunities (e.g., Brazil), and the impact of geopolitical risks in Eastern Europe. He also explores why we've reduced our weight and exposure in China and what a slowdown in emerging markets might mean for investors.

Key Points from this Episode:

• Main drivers behind the portfolio's rebound in performance from 2022

• New additions from Brazil: Petro Rio, GPS, XP

• China's increased risk profile and potential implications for emerging markets

• Softening demand and slowing global growth

Links:

Mawer Investment Management

Today on the podcast, Equity Analyst Michael Vogel discusses the importance of analyzing technological shifts beyond artificial intelligence and how these shifts can impact non-tech companies in the portfolio. Michael emphasizes the cultural approach to holding views lightly and shares examples of how the Research team navigates these changes.

Key Points From This Episode:

- Tech changes, non-tech companies adapting, potential shifts

- Image sensors improve, and Kodak sales rise steadily

- Electric cars and gas stations coexist profitably

- Positive impact of legal software and AI

- Analyzing investment matrix, tech shifts, and shared research

Links: Mawer Investment Management

A recap of the quarter and our thoughts on the hard vs. soft landing debate.

Highlights:

• Main drivers of the market pullback
• Inflation's persistent "stickiness" and potential implications of "higher for longer" interest rates
• How are consumers faring?
• Asset mix update
• Looking ahead—what's on our radar

Main themes impacting the portfolio and the benefits of systematically tracking investment decisions.

Highlights:

• Valuation considerations in a higher rate environment
• How (and why) we've started systematically tracking and analyzing our investment decisions
• Portfolio adjustments—adding AltaGas, exiting Enbridge and Agnico Eagle
• Quick dive into Dollarama's business model and some of the stock drivers

A look at the strategy a year on and why we think valuation should be more top of mind for investors.

Highlights:

• Influence of big tech stocks on the U.S. market and associated impacts to the small and mid cap space
• The AI theme continues—Elastic, Concentrix, Moderna
• Why is the U.S. market more expensive compared to its developed market peers?
• Regional banks—what happened, the current state, and opportunities (e.g., First Citizens Bank)
• Identifying potential economic themes through a bottom-up lens—Insperity, Dollar General, XPEL
• Some of the recent main performance drivers for the strategy—Winmark, Copart, Verisk, FLEETCOR, Global Industrial, Donnelley Financial

How we approach finding new ideas in the widest investment universe.

Highlights

• Eagles and vultures mental model—why idea generation is better enabled by one shared investment philosophy and knowledge base
  • E.g., Novo Nordisk and Publicis
• What is the "Bathroom List" and its role in our investment process and ESG considerations—e.g., JDE Peet's
• Why nuance matters when incorporating scuttlebutt—e.g., Publicis
• How we're continuously refining and improving our processes
• Current emerging markets exposure
• A walk through our qualitative risk assessment checklist
• Recommended reads from Manar

Unpacking one of our key mental models around investing and managing risk.

Highlights:

• What we mean by "non-predictive decision making"
• Examining the question, "what's your outlook and how you are positioned accordingly?" through a non-predictive decision-making lens
• The important difference between vulnerabilities and triggers
• Vulnerabilities we're paying attention to

Market drivers that stood out this quarter, where inflation is at, and an asset mix update.

Highlights:

• How markets have been climbing a "wall of worry"
• Recalling Cisco Systems and considering implications around the current concentration of tech stocks in the S&P 500
• Our thoughts on the continuing rate hikes and "soft landing" scenario
• Holding cash: what's changed?

Top highlights from the team's recent research trips and a few business models we're excited about.

Highlights:

• Insights from visiting Norway, the Netherlands, Kazakhstan, India and some holdings—Equinor, AutoStore™, Ahold Delhaize, Adyen, Genmab, Kaspi, Weir, HDFC Bank
• Why we've been reducing our weight in China and our current thinking around regional exposures
• The unique competitive advantages of Compass Group and Chugai
• Current and future implications of AI for the portfolio and different business models—NVIDIA, TSMC, ASML, Samsung, RELX, Wolters Kluwer, Teleperformance

A deep dive into key themes we've been focusing on, recent additions to the portfolio, and a few changes.

Highlights:

• Quick recap: What has changed with the portfolio since 2022?
• What we mean by "engaged owners" (and the difference they can make)
• Why we are looking for companies with lower duration
• How we try to find a variant perception from the market—and some examples
• Recent additions to the portfolio: Dermapharm, Donnelley Financial, Hikma, Ipsos, SoftwareONE, and Technogym
• Our new approach to the reverse roadshow process