Page 7 - DIY Investor Magazine | Issue 36

‘WE STILL EXPECT ASIAN COMPANIES TO DELIVER RESILIENT EARNINGS GROWTH FOR THE YEAR AHEAD’
Nevertheless, this is still an environment that requires prudence. At abrdn New Dawn Investment Trust, we continue to focus on those companies with visible growth, that can continue to thrive in a tougher global economic climate.
That has meant pulling back on some companies with more cyclical exposure or those that are export-led and putting even greater focus on quality. By quality, we mean those companies with a strong industry position, pricing power, good cash generation and strong balance sheets.
‘ACTIVITY MAY BE SUBDUED, BUT THE REGION IS NOT FACING THE EXTREME PROBLEMS OF ITS WESTERN PEERS’
PORTFOLIO WEIGHTINGS
Our focus on quality means a focus on the markets with the strongest companies. We have a large weighting in India.
We believe the country has a strong trajectory of growth, and offers a wide choice of high quality companies. We also hold a number of banks, including Bank Central Asia, DBS and Oversea-Chinese Banking Corporation, which should benefit from rising interest rates. Equally, loan growth is resilient and asset quality remains healthy.
The portfolio has retained exposure to higher growth areas. The China ‘A’ Shares market, for example, continues to prove a fertile source of opportunities. We have a quarter of the portfolio in China. We are also increasing our exposure to Vietnam, which has been a significant beneficiary of the re-engineering of global supply chains.
Technology is still a significant position, even though we have reduced positions in TSMC and Samsung. It is economically sensitive and we are conscious of that. However, these are high quality companies that will weather the cycle.
The corporate sector is robust, and there are fewer vulnerabilities, such as high debt.
7
Dec 2022
DIY Investor Magazine ·
Across Asia, activity may be subdued, but the region is not facing the extreme problems of its Western peers.
Companies selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance.
More information on abrdn New Dawn Investment Trust here >
INTERVIEW WITH JAMES THOM OF ABERDEEN NEW DAWN