Rohit Khuller, vice-president of investment management at Montreal-based Letko, Brosseau & Associates Inc., is actively increasing exposure to emerging market equities, expressing confidence in the growth potential of these regions without waiting for a market correction. Currently, the firm is holding only about 1.5 percent of its portfolio in cash, significantly lower than its usual average of 3 percent, positioning to capitalize on promising opportunities in countries such as China, India, Brazil, Mexico, and the Philippines.

Letko, Brosseau manages approximately $23 billion in assets, with roughly $3.4 billion allocated to emerging markets. Khuller, also a senior partner, highlights sectors including utilities, financials, industrials, and consumer discretionary as key areas for long-term growth, driven by rising income levels in these countries.

The firm’s flagship emerging markets fund, the Letko Brosseau Emerging Markets Equity Fund, which recently became available to retail investors, holds $2.7 billion in assets. The fund has delivered robust returns, posting a 29.4 percent gain over the past year. Its annualized returns stand at 19.9 percent over three years and 14.8 percent over five years, with a 9.4 percent average annualized return since its inception in February 2011. These returns are calculated net of fees, as of May 31.

Khuller identified several stocks that exemplify his bullish stance on emerging markets. Among them is El Grupo Aeroportuario Centro Norte, a Mexico-based operator managing 13 airports including the major hub of Monterrey. The company also oversees hotels and industrial parks. In 2025, the group handled 29 million passengers, an 8.5 percent increase from the prior year. Despite a current low air travel penetration rate of around 15 percent in Mexico, the firm anticipates growth fueled by rising personal incomes and increased airport-related spending. The stock trades at approximately 12 times projected earnings for the next year and offers a 6 percent dividend yield, with expected annual earnings growth of 12 to 15 percent over three to five years.

In India, Khuller highlighted HDFC Bank Ltd., the country’s largest private-sector bank by assets and market capitalization, with more than 100 million customers, nearly 10,000 branches, and over 21,000 ATMs across 4,100 cities and towns. The bank benefits from a low-cost structure and strong asset quality and is gaining market share from state-run competitors through superior customer service and technology. India’s youthful demographic, with a median age near 28 years, and a relatively low credit-to-GDP ratio of about 60 percent provide long-term growth drivers. HDFC Bank trades at around 12.4 times next year’s earnings and offers a 2 percent dividend yield, with earnings forecasted to grow at a compound annual rate of 13 percent over the next three years.

Another Indian stock favored by Khuller is NHPC Ltd., the country’s largest hydroelectric plant owner and operator. The company runs 8,500 megawatts of hydro capacity, representing 16 percent of India’s total hydroelectric power. NHPC is building 10 new hydro plants totaling 8,000 megawatts, expected to more than double earnings within five to six years. The stock’s valuation stands near 12.5 times projected earnings, with a dividend yield of about 3.1 percent. Hydroelectric power’s competitiveness and environmental advantages underpin Khuller’s positive outlook.

Khuller also disclosed recent portfolio adjustments, including trimming Kingboard Laminates Holdings Ltd. by approximately 80 percent due to valuation concerns. The Hong Kong-listed company is the world’s largest manufacturer of laminates for printed circuit boards. Since initiating the position in 2011, Letko Brosseau has realized an annualized return near 33 percent. Despite continued confidence in Kingboard’s market position and growth, the stock’s price-to-earnings ratio has expanded to over 40 times, up from 8 to 10 times at the initial purchase. Khuller indicated plans to potentially repurchase the stock if valuations become more attractive once demand normalizes after a surge driven by artificial intelligence-related electronic manufacturing.

This strategy reflects Letko, Brosseau’s broader approach of identifying durable growth opportunities in emerging markets by focusing on companies with solid fundamentals and reasonable valuations amid evolving economic landscapes.