Top innovators in emerging markets have gone unnoticed by global investors

The portfolio manager for Mobius Investment Trust, Carlos Hardenberg, identifies three emerging market stocks that he would invest in

Opportunities abound in emerging markets, particularly for the lesser-known innovators subtly influencing the future as well as the mega-caps that make headlines. We believe that these "under-the-radar" companies present some of the most exciting opportunities for long-term investors at the Mobius Investment Trust.

Our quality-focused, forward-thinking strategy is based on in-house research, which should give us access to exciting opportunities that the general public misses.

Opportunities are particularly attractive in Asia. India benefits from a young, middle-class populace, rapid digitization, and the momentum behind government reforms. Global supply chains for everything from semiconductors to next-generation AI infrastructure are centered in Taiwan.

In contrast, South Korea continuously enhances corporate governance while integrating top-notch innovation. When combined, these markets offer an ideal environment for identifying businesses with steady profits, a competitive edge, and the adaptability to deal with shifting market conditions.

Compared to the benchmark, our portfolio appears significantly different, with an active share of over 98 percent. By being different, we should be able to spot growth stories that others might overlook. Additionally, because we take an active ownership approach, we collaborate closely with business managers to promote governance, sustainability, and operations improvements.

Here are three examples of the types of companies we want to invest in to demonstrate our strategy: creative companies with unique market positions and exposure to long-term growth trends.

Watch these three stocks from emerging markets.

Most famously, E Ink (Taipei: 8069) is the company that makes the e-paper screens found in e-readers like the Kindle. The company has a monopoly-like hold on this specialized technology. In addition to e-books, it is driving a surge of electronic shelf labels in stores, enabling dynamic pricing and lowering labor costs. Long-term growth is possible because only a small portion of the potential market has been reached and thousands of patents have been filed to protect its technology.

CarTrade (Mumbai: CARTRADE) is one of India's top asset-light online marketplaces for buying and selling automobiles, including two-wheelers. CarTrade gains from strong long-term trends as the demand for used cars accelerates and car ownership remains low but rapidly increasing. Its shift to online classified ads with high margins, such as those on the international platform OLX, has increased profitability. The company also has a solid growth history and is debt-free.

In terms of atomic-force microscopes, which enable semiconductor companies to examine surfaces at the nanoscale, Park Systems (Seoul: 140860) is a pioneer. As chips get smaller and more intricate, this kind of accuracy becomes crucial. With a strong academic foundation and a founder-led leadership team, Park Systems has established a competitive edge and is ideally positioned to grow in tandem with the growing demand for cutting-edge semiconductors worldwide.

These are only three examples of the types of companies we target: creative, superior businesses in vibrant markets that are frequently disregarded by the general public but have the potential to produce long-term, sustainable growth.