Andrew Gillan, Head of Asia ex Japan Equities and Co-Portfolio Manager, provides an update covering the impact of the trade wars on the region, changes to the strategy year-to-date, his views on Southeast Asia and outlines the investment case for Asia.
Positioning has transitioned slightly away from China and into Southeast Asia
Southeast Asian countries such as Indonesia and the Philippines benefit from compelling growth and strong consumption
Trade war uncertainty is holding off corporate spending decisions, relocating manufacturing and impacting discretionary purchases but these concerns may be overplayed
Indian companies offer strong growth and attractive return on equity (ROE)
Asia is trading at a discount relative to global equities, and should benefit from a weaker US dollar
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Key investment risks: • The Fund invests at least two-thirds in equity or equity-related instruments in Asian markets, excluding Japan. The Fund may invest in China A-Shares, directly through eligible exchanges or indirectly through derivative instruments. • Investments involve varying degree of investment risks (e.g. liquidity, market, economic, political, regulatory, taxation, financial, interest rate, hedging and currency risks). In extreme market conditions, you may lose your entire investment. • Investments in financial derivatives instruments (“FDIs”) (such as futures, options, forwards and warrants) involve specific risks (e.g. counterparty, liquidity, leverage, volatility, valuation and over-the-counter transaction risk). The Fund may use FDIs to reduce risk and to manage the Fund more efficiently. • The Fund's investments are concentrated in Asia Pacific (excluding Japan) and may subject to higher concentration risk. • The Fund may invest in emerging markets which may involve increased risks. These investments may be less liquid and more volatile. • The Fund may invest in China securities i.e. China A-Shares and China A-Shares access products, and may be exposed to currency, political, taxation and market risks. • The investment decision is yours. If you are in any doubt about the contents of this document, you should seek independent professional financial advice. • Investors should not only base on this document alone to make investment decisions and should read the offering documents including the risk factors for further details.