The reason I chose Asia is because it is a region that is made up of recognisable, vibrant and investable developed and emerging countries. Here, the WEO predicts the region’s GDP growth as a whole to be 5.3% this year, with developed Asia growing by 1.2% and emerging Asia by 6.6%.
So is this an argument for investing in the region of Asia, or emerging Asia, or widening it further to emerging markets worldwide?
Or is it actually an argument for ignoring economic indicators and focussing on the other end of the spectrum to look exclusively at company fundamentals?
The real answer is almost always ‘somewhere in between’ and in Asia’s case it has to be a balance of the two. But, the long-term economic and other macro factors have been known for some time so while they have has a tough three or four years, the best-placed Asia equity funds looking forwards are more likely to be those that run bottom-up strategies.
As a slight aside, I recently asked a well-known Asia equity (growth and income) fund manager about the overlap of Asia and emerging market investing and whether the former is simply a proxy for the latter. His reply was: “It is about time we stopped referring to over half the world’s population and some of its most educated workforces as ‘emerging’”.
