A fund that looks past the short term in Asia
Growth should remain strong, but successful managers also need to focus on governance. Here's how to find active opportunities in Asian markets.


Emerging markets – and notably Asian economies – are still expected to grow much faster than developed economies over the next few years, even factoring in the impact of tariffs.
India is the prime example. Its GDP is expected to increase by 6.2% in 2025 and by 6.3% in 2026, according to the IMF, compared to just 1.4% and 1.5% for advanced economies. China is forecast to grow at 4% for the next two years.
Yet finding opportunities in these markets requires an edge. Most Asian markets remain inefficient, so an active approach is necessary.
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An active edge
The £460 million Pacific Assets Trust (LSE: PAC) has been investing across the Asia Pacific region (excluding Japan, Australia and New Zealand) since 1985. Stewart Investors took over the portfolio in 2010, building on an established record. Over that time, the trust has achieved a net asset value (NAV) return of 270%, compared with 150% for the MSCI AC Asia ex Japan index and the peer group average of 243%.
In Asia, investors must be cautious when deploying their money, says Doug Ledingham, one of the trust’s co-managers, who has been with Stewart Investors since 2013. “If you look at the index... you’re potentially handing your money to poorly run state-owned companies, you’re handing your money to entrepreneurs and families that perhaps don’t have your best interests at heart.”
That’s particularly true of China, which accounts for around a third of the trust’s benchmark. “The vast majority of companies in China are state-owned,” he says. For that reason, investments tend to be determined by the state rather than their profitability.
Favouring India
China makes up around 17% of Pacific Assets Trust’s portfolio, while India is the largest country-specific allocation at just under 35%. That’s been the case since Stewart took over and is a “function of the depth of opportunities that we find in India," Ledingham says. “It’s where there’s the greatest opportunity to find great companies, great families.”
It’s that latter point that helps the trust stand out in a crowded market. Ledingham says the only way the trust can be sure its companies are focused on the long term is to stick with family-owned, generational companies. The top-ten positions in the portfolio have been held for an average of nine years, with two-thirds of the portfolio being held for at least five years.
Mahindra & Mahindra, one of India’s largest car makers, is the biggest holding in the portfolio at 5%. Compare that with the index, which has semiconductor manufacturer TSMC as the largest holding, with a weight of nearly 10%, and you can see how the trust differentiates itself.
Mahindra & Mahindra has a “wonderful combination of long-term ownership in the family [and] a professional CEO. A really, really powerful combination”, says Ledingham. Over the past five years, the stock has returned 760%, compared with 213% for TSMC. Since 2010, the stock has returned 1,200%.
No knee-jerk changes
While the managers are monitoring the impact that tariffs will have, Ledingham says they are not making any knee-jerk changes to the portfolio. “In periods of market volatility, we try not to touch the portfolio too much, and our focus is really on spending time with our companies, speaking to the people behind them and reiterating what they’re thinking.”
Instability makes it all the more important to be invested alongside “trustworthy families and entrepreneurs that have their own money invested alongside yours” who can look past short-term volatility. With the trust trading at a discount to NAV of just shy of 12%, investors can buy some of Asia’s most remarkable growth stories at a discount.
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Rupert is the former deputy digital editor of MoneyWeek. He's an active investor and has always been fascinated by the world of business and investing. His style has been heavily influenced by US investors Warren Buffett and Philip Carret. He is always looking for high-quality growth opportunities trading at a reasonable price, preferring cash generative businesses with strong balance sheets over blue-sky growth stocks.
Rupert has written for many UK and international publications including the Motley Fool, Gurufocus and ValueWalk, aimed at a range of readers; from the first timers to experienced high-net-worth individuals. Rupert has also founded and managed several businesses, including the New York-based hedge fund newsletter, Hidden Value Stocks. He has written over 20 ebooks and appeared as an expert commentator on the BBC World Service.
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