Letter to Investors

Jan 2024

Dear Investors,

As we reflect on a volatile year 2023, we are reminded of the words of Winston Churchill: "A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty."

The year unfolded with global fears of inflation, coupled with concerns over the ongoing conflict in Ukraine and uncertainties surrounding the US and European economies. A sluggish recovery in China and unsettling events, such as the terrorist attacks in Israel and the ensuing conflict added layers of complexity and prompted cautious positioning by investors.

Since our launch in 2018, MCP has weathered a pandemic, geopolitical turbulence and economic shocks. Our strategic choices, based on a rigorous focus on quality, careful selection of management teams and business models, and a vigilant awareness of macroeconomic and company-specific risks, have steered us through these turbulent waters. We avoided investing in Russia and had almost no direct exposure to China. By taking advantage of the opportunities presented by market conditions, the Mobius Emerging Markets Fund (MEMF) has generated sustainable long-term returns, culminating in a five-year track record of significant outperformance, with return of 26.9% (Private C USD Founder, as of 29 September 2023) since inception compared with the MSCI EM USD Index return of -8.6%. In the current year alone, MEMF has outperformed the MSCI EM Index by an impressive 10% (as of 29 December 2023).

One of the exciting companies that have contributed to our success is Classys. Founded as a family business in Seoul in 2007, Classys is the global market leader (ex-US) in non-invasive medical aesthetic devices with a 30% market share. Its cutting-edge devices use high-intensity focused ultrasound (HIFU) and radio frequency (RF). Classys' "razor and blade" business model, which sells both medical devices and cartridges, has led to continuous gross margin improvements. Although the company is already present in 70 countries, its expansion into the US and China offers immense growth opportunities. In the third quarter of 2023, Classys again reported robust results, driven by product innovation and geographic expansion, and has provided positive guidance for FY24.

This positive momentum is not limited to Classys; it is evident across our portfolio. In particular, our technology holdings are seeing inventories normalise and demand pick up. Our quality portfolio companies have demonstrated resilience and adaptability, and as business and consumer spending continues to improve, our companies will benefit from the recovery. Although developed markets outperformed emerging markets in2023, low valuations, a potentially weaker USD and expected higher growth suggest a positive outlook for emerging markets in 2024.

We recently announced Mark Mobius' well-deserved retirement from Mobius Capital Partners. We would like to express our gratitude for his mentorship, leadership, and the remarkable energy and passion he brought not only to the business but also to our lives. The firm and its vehicles continue seamlessly under Carlos Hardenberg’s leadership, supported by our exceptional team of passionate and dedicated analysts. We are committed to continuing to deliver superior long-term returns over the next decade.

We thank you for your continued trust and support. As we embark on the exciting path ahead, we wish you a happy and prosperous New Year. Thank you for being an integral part of our journey.

The Mobius Capital Partners Team

Disclaimer: Past performance and/or forecasts of any investment are not indicative of future results. The value of any investment and any income generated from it is not guaranteed and can fall as well as rise. This means that an investor may not get back the amount invested. Subscriptions for shares of the Funds should only be made on the basis of the latest Prospectus and Key Investor Information Document. MCP is only able to provide services to investors who can be categorised as professional or eligible counterparty clients under FCA rules. As such, if you are a retail investor interested in an MCP product (i.e. fund) you should contact your financial adviser rather than MCP for further information.