The ÖKOWORLD Growing Markets 2.0 Strategy

German asset manager ÖKOWORLD has positioned its Growing Markets 2.0 equity fund to capture what it calls the “second wave” of emerging-market growth. Instead of tracking broad benchmarks, the fund hunts for small- and mid-cap companies across developing economies that are tied to long‑term structural shifts: rising middle-class consumption, digitalisation, healthcare, infrastructure, and education.

Manager Michael Molter argues that traditional headwinds for emerging markets — such as a strong US dollar and China’s economic cooling — are now abating in trend terms. He points to a crucial tailwind: the relentless expansion of middle classes in Asia and beyond, which is driving demand in the very sectors the fund targets.

A second pillar is the AI supply chain. The fund invests in firms that improve energy efficiency in data centres and AI infrastructure, a theme Molter believes will intensify as record global investments in AI computing raise electricity needs. The fund’s small‑cap focus means it looks for niche companies whose earnings power the broader market may be underestimating.

Sustainability is not an afterthought: ÖKOWORLD only buys companies that make a positive contribution to sustainable development, while still offering attractive financial prospects. Quantitative screening and AI support the research, but final stock picks rely on human-led fundamental analysis and the team’s decades of experience.

What's Behind the EM Small-Cap Bet

The fund’s pitch revolves around two intertwined narratives: the consumer power of emerging-market demographics and the global AI capex cycle. While both trends are real, the investment thesis hinges on the ability of a small‑cap fund to pick winners that are genuinely mispriced — a notoriously difficult task in less‑liquid, less‑transparent markets. Molter’s team uses proprietary analysis and AI‑aided data processing, but human judgement remains the final filter, which can be a strength or a weakness depending on the team’s skill.

Assessing the AI Supply‑Chain Angle

Molter’s claim that certain EM firms are “excellently positioned” in the AI supply chain is plausible — many components for data‑centre cooling, power management, and precision engineering are manufactured in Asia. However, the fund’s promotional material does not disclose specific holdings or how much of the portfolio is truly AI‑linked versus general industrial efficiency. Without such detail, the AI angle remains a broad thematic promise rather than a verifiable edge.

Sustainability as a Filter, Not a Guarantee

ÖKOWORLD’s strict ESG filter reduces exposure to governance‑heavy sectors and state‑owned enterprises, which can lower political risk but also exclude some high‑growth names. While the approach may appeal to sustainability‑conscious investors, it could equally constrain returns if the best EM performers happen to be outside the ESG universe. The fund’s year‑to‑date performance is cited as evidence, but past returns in small‑caps can be highly volatile and are no guide to the future.

Who Gains and Who Loses

Investors who believe in active management and want a concentrated EM small‑cap sleeve may find the fund an interesting option. Those who prefer passive, low‑cost exposure or are wary of manager‑specific risk would likely look elsewhere. The absence of detailed portfolio disclosures in this promotional piece makes independent assessment difficult — a common feature of fund marketing rather than independent analysis.