ANNUAL REPORT OF MOBIUS INVESTMENT TRUST PLC
FOR THE YEAR ENDED 30 NOVEMBER 2022
MOBIUS INVESTMENT TRUST PLC ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
1
2 Strategic Report
2 Financial Highlights
3 Why Invest in Emerging Markets and MMIT
6 Chairman’s Statement
9 Investment Objective and Policy
11 Investment Portfolio
13 Investment Managers’ Review
21 Business Review
36 Governance
36 Board of Directors
38 Report of the Directors
43 Corporate Governance
53 Statement of Directors’ Responsibilities
54 Audit Committee Report
58 Directors’ Remuneration Report
62 Independent Auditors’ Report
70 Financial Statements
70 Income Statement
71 Statement of Changes in Equity
72 Statement of Financial Position
73 Notes to the Financial Statements
83 Further Information and Notice of AGM
83 AIFMD Related Disclosure
84 Shareholder Information
86 Glossary of Terms and Alternative Performance
Measures (“APMs”)
88 How to Invest
89 Notice of the Annual General Meeting
93 Explanatory Notes to the Resolutions
96 Directors and other Information
CONTENTS
ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
2022 Winner of Citywire’s
Best Global Emerging Market Equities Trust
Shortlisted for Investment Week’s
Investment Company of the Year Awards 2022
in the Global Emerging Markets category
2 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
As at As at
30 November 30 November
2022 2021 % change
Net Asset Value per Ordinary share† 134.2p 153.4p (12.5%)
Share price 131.0p 154.5p (15.2%)
(Discount)/premium to Net Asset Value per share^ (2.4%) 0.7% –
† UK GAAP measure
^ Alternative performance measure, see Glossary beginning on page 86.
Year ended Year ended
30 November 30 November
2022 2021
Net Asset Value per Ordinary share total return*^ (12.3%) +44.9%
Share price total return*^ (15.0%) +50.0%
Ongoing charges* 1.5% 1.5%
Dividend per share – final 1.20p 0.35p
* Source: Morningstar.
^ Alternative performance measure, see Glossary beginning on page 86.
Total Return Performance for the Year to 30 November 2022^
^ Alternative performance measure, see Glossary beginning on page 86.
70
75
80
85
90
95
100
105
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Net Asset Value per share -12.3%
Share Price -15.0%
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
May-22
Apr-22
Jun-22
Source: Morningstar
Figures have been rebased to 100 as at 30 November 2021
FINANCIAL HIGHLIGHTS
3ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
WHY INVEST IN EMERGING MARKETS
12.9%
11.1%
10.4%
3.5%
0%
4%
8%
12%
16%
Brazil China South
Korea
US
Morningstar: Expected equity market annual return
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
5
10
15
20
25
30
35
40
45
2006
2008
2010
2012
2014
2016
2018
2020
2022
Valuation Premium/Discount
P/E Ratios
Valuation Premium/Discount (RHS)
MSCI EM P/E (LHS)
MSCI World P/E (LHS)
EM equities are trading at a record discount
compared to developed markets
Morningstar: EM equity markets expected to
deliver the highest returns in the next 10 years
Economic growth in emerging markets is
expected to rebound, as DM GDP is declining
Emerging markets’ share of the global GDP is
expected to increase
6.0
3.2
2.7
5.2
2.4
1.1
6.6
3.7 3.7
7.2
4.4
4.9
0
2
4
6
8
2021 2022* 2023*
GDP Forecast (%)
World DM EM EM Asia
35%
40%
45%
50%
55%
60%
65%
2020 2022 2024* 2026*
% Share of global GDP, by region
EM DM
Following past crises, emerging market equities have delivered strong returns
200
300
400
500
600
1997 1998 1999 200
0
1997: Asian Financial Crisis
400
600
800
1000
1200
1400
2007 2008 2009 20
1
2008: Global Financial Crisis
+75%
700
900
1100
1300
1500
2018 2019 2020
2020: Covid-19 Pandemic
85%
800
900
1000
1100
1200
1300
1400
1500
2020 2021 2022
2022: Russia’s Invasion of Ukraine
+64%
Source: Bloomberg, Morningstar, FT, Data as of 14 February 2023
Source: IMF, Statista Data as of 11 October 2022 (latest WEO Database Update)
Source: Bloomberg, MSCI EM Index data as of 03 January 2023
4 MOBIUS INVESTMENT TRUST PLC
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
WHY INVEST IN EMERGING MARKETS continued
Emerging markets currencies strengthening as the USD rally is losing steam
90
95
100
105
110
115
120
Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23
USD Index EM Currency Basket
Inflation across emerging market economies has peaked
0
5
10
15
20
25
30
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023*
2024*
2025*
2026*
2027*
YoY CPI Change (%)
EM EM Asia
EM Europe EM LatAm
EM Middle East EM Africa
Forecast
The Asian middle class on the rise: Increased domestic demand and spending power in the long run
1,380
2,023
2,784
3,492
724
736
738
733
335
344
350
354
0
500
1000
1500
2000
2500
3000
3500
4000
2015 2020 2025* 2030*
Population in millions
Forecast of the middle class population, by region
Asia-Pacific
Europe
North America
+153%
Source: Bloomberg, Data as of 05 January 2023
Source: IMF, Data as of October 11 (latest WEO Database Update)
Source: Statista, Data as of 11 August 2022
5ANNUAL REPORT FOR THE YEAR ENDED 30 NOVEMBER 2022
Strategic Independent Financial Further Information
Report Governance Auditors’ Report Statements and Notice of AGM
Strong Performance
+44.1% return since inception
#1 in the Peer Group
LSE-listed EM equity trusts
Concentrated Portfolio
22 high-conviction ideas
High Active Share
97% against MSCI EM Index
Vast Network in EM
Curated over 40+ years
Profitability Leaders
14.9% profit margin
Quality companies
-0.8% net debt/EBITDA
ESG+C® Engagement
Tailored to every holding
Unique Strategy With a Focus on Quality and Engagement
Well Positioned for the Recovery
China-reopening: Boosting economic
activity throughout Asia
Recovery in Asia vs. slowing growth
in developed markets
Record low valuations, especially
relative to developed markets
EM ahead of DM in the hiking cycle
– ripe for cuts in 2023
We continue to discover unique,
innovative businesses in EM
Portfolio well-positioned to benefit
from the upcoming recovery
Strong earnings potential for 2023
and beyond
Portfolio companies: Highly
profitable, no leverage, top managers
WHY INVEST IN MMIT
Source: Mobius Capital Partners LLP, Data as of 31 January 2023, all figures in GBP