Conventional wisdom holds that investors must choose between growth, value, and quality. Pick two, at best. Growth can be bought, but rarely at a bargain. Value often comes with structural decay or governance risk. And true quality almost never goes on sale.
Finding all three in a single investment is difficult indeed. Yet in the world’s most overlooked markets, this so-called trifecta exists.
At Evli, this is the challenge we embrace. Across a universe spanning more than 30 countries and roughly 15,000 listed companies, deep and persistent market inefficiencies allow disciplined investors to uncover high-quality businesses, growing rapidly, at valuations that defy conventional logic.
The key is not forecasting the macro cycle. It is abandoning the indices and looking where others won’t.
Where inefficiency still exists
The most compelling opportunities are typically found far outside global benchmarks, in parts of the market systematically ignored by passive capital and index-tracking giants. These are companies with:
- Low analyst coverage
- Limited foreign ownership
- Small or mid-cap market capitalizations
- Business models that are locally dominant but globally invisible
With thousands of stocks to analyze and information that filters slowly into prices, finding inefficiencies is much more realistic.
Since its launch in 2013, the Evli Emerging Frontier fund has adhered to a clear philosophy. This is not merely “Growth at a reasonable price.” It is growth at prices that appear unreasonable given the underlying quality of the business.
That opportunity set exists across cycles. It does not rely on benign macro conditions, perfect liquidity, or favorable sentiment, only on disciplined stock selection in inefficient markets.
Evolution of the team and process
As we close the chapter on 2025, we are excited about the evolution in our unit into the Evli Emerging and Frontier Markets Team. This reflects a reinforcement of our long-standing strategy.
The new team is led by Mathias Althoff, who brings extensive experience from Tundra Fonder, alongside Antti Sivonen, a veteran who has been responsible for all execution of the fund since 2013. We thank departing analysts Burton Flynn and Ivan Nechunaev for their valuable contributions and wish them the best in their next chapters.
Looking ahead, we are strengthening our research capabilities by adding two analysts who will be partly based in our international hub in Dubai. This strategic presence reduces information latency and brings us closer to the markets we cover. We remain steadfast in our dedication to on-the-ground research. Meeting management teams face-to-face and seeing operations in person has always been, and will remain, a key part of the fund's alpha.
At the same time, we continue to refine our quantitative screening and harness internal AI capabilities. For us, AI is not a substitute for judgment. It allows us to gather information at scale, reduce noise and spend more time on deep fundamental work. In today’s market, combining human insight with advanced tools is not optional. It is essential.
The strategy: peeling back layers of inefficiency
Finding companies that are growing fast, highly profitable, and attractively priced requires venturing deep into the inefficient end of the market spectrum. We view inefficiency as a series of layers, the further you peel them back, the higher the probability of uncovering mispriced assets.
We move:
- From developed markets to emerging and frontier economies
- From large caps to under-researched small and mid-caps
- From benchmark constituents to companies entirely outside country indices
By operating off-grid, we ensure that information asymmetry works in our favor.
To qualify, every company must meet a rigorous bar:
- Predictable growth (typically 20%+ earnings growth), driven by forces such as urbanization or demographic change - not speculative narratives
- High quality, reflected in strong returns on invested capital and durable competitive advantages
- A valuation that offers us a comfortable margin of safety.
2025 performance review
The fund generated a net return of +14.67 percent in 2025, resulting in an annualized total return of 11.41 percent over the past 10 years. These returns were driven largely by specific stock selection rather than top-down macro positioning, and should not be read as a guarantee of similar outcomes going forward.
The winners
- Hartadinata (Indonesia): Benefited from the country’s push to build a fully integrated domestic gold ecosystem.
- Newborn Town (Hong Kong): Delivered strong growth by tapping into digitally savvy MENA demographics.
- Moura Dubeux (Brazil): A homebuilder using a buyer-financed construction model that minimizes reliance on bank debt.
The “doublers”
Of the 18 new positions initiated during the year, three doubled within 12 months:
- Minth Group: Successfully pivoted into EV battery housings.
- GFH Financial Group: Transformed into a diversified conduit for Gulf capital into global markets.
- Acter Group: A cleanroom manufacturer benefiting from the semiconductor capex cycle without bearing technology risk.
The detractors
Former strong performers Surya Semesta (Indonesia) and Airlink (Pakistan) weighed on returns, reinforcing that idiosyncratic volatility is an inherent feature of this opportunity set.
A diverse opportunity set, not a macro bet
Market conditions varied widely across regions in 2025, underscoring the importance of stock selection over top-down calls. Structural reforms, demographic shifts, and localized growth dynamics—not synchronized global cycles—continued to drive outcomes.
As we enter 2026, the portfolio remains deliberately differentiated from global benchmarks. Please note that the fund does not have an official benchmark index. Active share is high, correlations are low, and valuation discipline remains intact.
| Metric | Evli Emerging Frontier Fund | Emerging Markets Index |
| P/E (2026E) | 8.7x | 15.5x |
| ROE (2026E) | 20% | 14% |
| Operating Margin (Trailing) | 20% | 15% |
Outlook: enduring strategy with potential tailwinds
Our investment case does not depend on macro forecasts. The strategy is designed to work across reasonable long-term environments by exploiting structural inefficiencies that persist regardless of sentiment.
That said, the current backdrop may offer additional support. Emerging Market equities trade at a significant discount to developed markets, while earnings growth expectations remain competitive. A softer US dollar, lower global rates, or broader diffusion of AI-driven investment into manufacturing and industrial supply chains would represent incremental upside. But these are not prerequisites.
The opportunity set remains as rich as ever. By operating in markets defined by neglect rather than hype, we continue to demand and find better growth, higher quality, and lower prices.
* Historical returns are no guarantee of future returns. The value of an investment may rise and fall and the investor may lose some or all of the capital invested. The contents of this blog should not be considered as investment advice and should not be relied upon in making an investment decision. Before making an investment decision, you should consult the fund's legal documents, such as the fund rules, the key investor document and the fund prospectus. The statutory documents and additional information of the funds are available on the product-specific pages and on www.evli.com/funds.
The fund’s investment activities are aimed at maximizing the increase in the value of assets. As the fund’s return expectation and risk level are high, we recommend the fund to experienced investors with long investment horizons. All the fund’s assets are invested in emerging economies’ equity markets, which means that the fund’s value may fluctuate abruptly within a short period as a result of the general performance of the target markets and exchange rate fluctuations. More information on risks are available in the fund prospectus.
