The Fund posted a negative performance over the month
as our Chinese consumer (Miniso, VIPShop) and new technology (Daqo New Energy, Tuya) stock picks fared badly.
However, our Taiwanese investments along the semiconductor value chain (TSMC, Mediatek and Wiwynn) performed extremely well.
Despite short-term volatility and the structural challenges facing the economy, we still have an optimistic view of Chinese and Taiwanese equity markets.
China’s structural problems remain, with domestic consumption struggling to recover, especially among the middle classes now that house prices have fallen and youth unemployment is high.
We remain convinced about the potential for China’s and Taiwan’s new economies and, in particular, the secular trends that we are seeing in artificial intelligence, the green transition and healthcare.
We feel sure that our approach, focused on a fundamental analysis and enterprise values, is the best way to generate positive long-term returns on Chinese markets.
Our portfolio is mostly positioned in Chinese companies that are generating high cash flows (Miniso, New Oriental) and Taiwanese firms active in the semiconductor value chain and likely to benefit from the AI revolution.
During the month we took profits on stocks that had performed well, such as Tencent Music. Conversely, we increased exposure to Taiwan through a position in Elite Material, a Taiwanese company specialised in the processing of basic materials for the printed circuit board industry.
Asia | 100.0 % |
Total % Equities | 100.0 % |
Through an active conviction and sustainable approach, we focus on domestic companies in China's new economy that can benefit from the country's economic transition and long-term reforms.
Market environment