Two top Asia-focused investment trusts
Pacific Assets and Scottish Oriental are both trusts that focus on high-quality companies controlled by trustworthy families or founders

Until FSSA split from Stewart Investors nearly ten years ago, Pacific Assets Trust (LSE: PAC) and Scottish Oriental Smaller Companies Trust (LSE: SST) were managed under the same roof, with the former investing in larger companies in Asia, excluding Japan, and the latter in smaller companies. A decade later, it’s as if they never parted company.
The performance of SST, with £500 million of net assets, is ahead of Pacific Assets, with £410 million – 65% versus 52% over five years, 41% versus 15% over three and 15% versus 10% over one. That’s thanks to the outperformance of smaller companies in Asia, which has been unusual in a global context. Relative to their own benchmark indices, SST is well ahead over one and three years and slightly ahead over five, while Pacific Assets is well ahead over five and three years but 10% behind over one. Both trade on a mid-teens discount to net asset value (NAV).
The weak recent performance of Pacific Assets is attributable to its low exposure to China, which accounts for 10% of the portfolio against 41% for India. “The vast majority of the Chinese market is state-owned or controlled,” says manager Douglas Ledingham of Stewart Investors. “We don’t want to hand your money to the Chinese Communist Party.”
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Stewart Investors favours family-controlled companies (57% of the portfolio) or ones controlled by entrepreneurs (28%), though Ledingham adds that there are some “very questionable” families in Asia. “We see only 3% of the largest 100 Chinese companies as investible against 27% for India.” Quality, sustainability and reliable people are the key characteristics he looks for.
The investment approach of Sree Agarwal of FSSA, the manager of SST, is similar but with more focus on reasonably priced long-term growth. SST is looking for “small caps which have the potential to be the large caps of the future”.
Trimming India
Pacific Assets puts more emphasis on long-term holdings with an average holding period of ten years, while SST appears more pragmatic. This showed last year, when SST’s exposure to India was significantly reduced in favour of China, Hong Kong and Taiwan. “We have been trimming some of our Indian companies on valuation grounds in favour of very high-quality names in China and Southeast Asian markets, which are trading at rarely seen valuations,” says Agarwal. The trust still has 34% of the portfolio in India but 25% is now in China and another 11% in Hong Kong and Taiwan.
For example, Agarwal has bought into DPC Dash, now the largest holding at 6.9% of SST. It holds the Domino’s Pizza franchise in China, where it is gaining momentum. China has just one-third the number of pizza stores per capita compared to Japan and South Korea, he says. “We expect it to grow at a mid-teens rate, while market leader Pizza Hut has been losing market share." The founders of DPC Dash bought the franchise, which had 18 stores, in 2010. By the end of 2024 it had more than 1,000 stores in 39 cities, yet has the potential to become several times its current size.
Both managers remain long- term bullish on Indian equities, despite their strong performance and high valuations. “The median age of Indians is only 35,” says Ledingham, “and manufacturing wages are just a quarter of those in China. As a result, a quarter of iPhones are now made in India.”
Pacific Assets’ holdings have little overlap with the larger Asia and emerging markets trusts and funds. SST is one of three Asian small cap specialists but there are no trusts covering small caps across all emerging markets. Both look attractive, but SST’s shrewd navigation of the return to favour of Chinese equities, while most commentators have remained sceptical surely gives it the edge.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Max has an Economics degree from the University of Cambridge and is a chartered accountant. He worked at Investec Asset Management for 12 years, managing multi-asset funds investing in internally and externally managed funds, including investment trusts. This included a fund of investment trusts which grew to £120m+. Max has managed ten investment trusts (winning many awards) and sat on the boards of three trusts – two directorships are still active.
After 39 years in financial services, including 30 as a professional fund manager, Max took semi-retirement in 2017. Max has been a MoneyWeek columnist since 2016 writing about investment funds and more generally on markets online, plus occasional opinion pieces. He also writes for the Investment Trust Handbook each year and has contributed to The Daily Telegraph and other publications. See here for details of current investments held by Max.
-
Two thirds of easy access savings accounts come with restrictions – can you access your savings in an emergency?
Out of the top 30 easy access savings on the market, 22 come with some sort of restriction on how fast you can access your money, according to new research.
-
Most popular London boroughs: Full list of in-demand places to move to
A deluge of people move to or within Britain’s capital each year – but which area is the most popular? We look at the most in-demand London boroughs in 2025.
-
Global investors have overlooked some of China’s best growth stocks
Opinion Dale Nicholls, portfolio manager, Fidelity China Special Situations, highlights three Chinese businesses where he’d put his money
-
How Next defied the odds and positioned itself as a British high-street staple
Next rose from a near-death experience and now thrives as a high-street staple. What's driving its success – and should you invest in the retailer?
-
Alok Sama on AI and how to invest in the future of technology
Interview Alok Sama, the former president and chief financial officer of Masayoshi Son’s investment vehicle SoftBank Group International, explains AI’s potential
-
The private equity puzzle
Listed private equity trusts still trade at large discounts, despite sales that validate their valuations
-
Why investors should avoid market monomania
Opinion Today’s overwhelming focus on US markets leaves investors guessing about opportunities and risks elsewhere
-
Can Rachel Reeves save the City?
Opinion Chancellor Rachel Reeves is mulling a tax cut, which would be welcome – but it’s nowhere near enough, says Matthew Lynn
-
Pierre-Édouard Stérin wants to make France great again
Conservative billionaire Pierre-Édouard Stérin is seeking to lead a political and spiritual renaissance across the Channel. The planning looks meticulous
-
Global investors have overlooked the top innovators in emerging markets
Opinion Carlos Hardenberg, portfolio manager, Mobius Investment Trust, highlights three emerging market stocks where he’d put his money