Where to Invest $1 Million: Mobius Sees ‘Real Future’ in India
The emerging markets investor says there are opportunities in India’s infrastructure and Korea’s beauty industry.
Veteran emerging-markets fund manager Mark Mobius has traveled the world visiting far-flung companies for decades — first at Franklin Templeton Investments and now for Mobius Capital Partners, the firm he co-founded in 2018.
After living in Singapore for many years, the famed investor recently moved to an apartment he owns in Dubai that looks out at the Burj Khalifa, the world’s tallest skyscraper.
In a phone conversation, Mobius, 86, spoke about where he sees the greatest opportunities in emerging markets. He’s still invested in China, despite the risks of a confrontation over Taiwan.
But he said the numbers tell a better story in India. The population is larger and younger, and its economy is growing faster than China’s. Mobius said he isn’t deterred by a short-seller report earlier this year that targeted the Adani Group, the high-profile Indian conglomerate.
“It was clear from the beginning that the Adani family was deeply involved in the companies and also that they were heavily leveraged,” Mobius said. “However, evidence of extensive wrongdoing is not clear. Also, one such incident, just like any such incident in the US market, would not deter us, since there are so many excellent companies in India.”
On a lighter topic — how to spend $1 million on a personal passion — Mobius’s idea is grounded in Long Island, New York, where he grew up.
For those who like to invest using exchange-traded funds, Bloomberg Intelligence senior ETF analyst Eric Balchunas and ETF associate Andre Yapp suggest ways to play on Mobius’s themes.
Mark Mobius, co-founder, Mobius Capital Partners
Betting on Indian growth
The idea: To me, India is the real future. Of course, the market has done very well and we’re near the top of the recent past, but nevertheless we are finding big bargains in wonderful companies.
India’s growth rate is 7%-plus, which is among the highest in the world. A rule of thumb is that if the country has a 7% growth rate, then a reasonably good company should be able to double that. We expect 14% earnings per share growth, and we insist on a return on capital or return on assets of 20% or more.
The strategy: Our big holding in India is APL Apollo Tubes, which makes tubing for construction. Building is booming in India — you travel around and see roads, bridges, tunnels being built. Most of Apollo’s products go into private construction, private homes and high-rise buildings, even in furniture. They’re replacing the old bricks-and-mortar type of construction and using precast concrete, iron bars in cement, that sort of stuff. It’s much lighter and easier to construct.
We also own a company doing health-care testing, Metropolis Healthcare, and recently invested in a company that does airline lounges, Dreamfolks Services. Air travel in India is booming, and more people are traveling inside and out of the country. We also have software companies — we own CE Info Systems, which does things like geospatial software, and Persistent Systems, which does outsourced software product development.
Drilling down: We have 15% of our fund in India and would like it to get to 20% or 25%. To add to India, we’d probably have less in Taiwan, because a lot of the companies have matured in Taiwan. We’ve invested in a number of fabless companies there, because with AI becoming more and more important the demand for high-end semiconductors will increase.
Our third-largest weighting is Korea, which has set its sights on becoming an entertainment capital. I was at the Expo in Dubai and one of the boy bands was entertaining and it’s an Arab audience and they all knew the words. The Koreans are also doing a lot in beauty work, in the electronic enhancement of beauty. They use deep heat and deep cold to stimulate the cells in the face and enhance the beauty of the skin. With the higher incomes not only in Korea but globally, it’s a big and growing field and the Koreans are leaders. We own a company called Classys.