The Latest Views of Mark Mobius and Some History
Franklin Templeton emerging markets guru Mark Mobius has been on the investment beat for decades managing several funds and serving as a pundit from time to time. He was recently featured in Fortune magazine and provided his latest outlook for the emerging markets.
Mobius feels concerns regarding China’s growth are overblown with his most pessimistic view being a slowdown to a 5% growth rate. The reason Chinese stocks have suffered is because of tremendous IPO issuance, he says. Mobius is focusing on big energy companies due to the voracious demand for oil and coal he foresees. “Over the long term the trends are very clear: Commodity prices will continue to rise,” he added. There is much more in the Fortune article [link].
Debashis Basu and Jason Monteiro have written a less than complimentary examination of Mobius’ investment insights and fund management at Moneylife. They expose some of the gaffs and perceived conflicts with Mobius’ so-called value oriented investment style. Basu and Monteiro say Mobius completely missed the Asian crisis in 1997 which ended up costing his investors. They complain about his poor choice of investments in Indian stocks and a littany of other missteps. No investor is perfect, but Basu and Monteiro’s article makes for interesting reading [link].
Mobius also completely missed the financial crisis of 2008 and 2009 which was chronicled here [link]. In September of 2007 he saw the sub-prime crisis as a temporary phenomenon which was the popular, but entirely wrongheaded, view at the time.
It might be instructive to look at the performance of the Franklin Templeton Developing Markets Trust (TEDMX, run by Mobius) versus Vanguard’s Emerging Market Index fund (VEIEX). The chart below shows Mobius’s fund closely tracking the index until around the time of the financial crisis indicating some investment blunders under the stress of the turmoil. It doesn’t help that the expense ratio on TEDMX is around five times that of Vanguard’s index fund. For the 10-year period ending September 29, 2012, according to Yahoo Finance, TEDMX returned 13.5% annually versus VEIEX’s annual return of 16.6%. That is a lot of return to sacrifice to invest with the “investment guru.”