WEBVTT 00:00:00.000 --> 00:00:05.530 align:middle line:90% 00:00:05.530 --> 00:00:06.250 align:middle line:90% Great thank you. 00:00:06.250 --> 00:00:08.330 align:middle line:90% Can you hear me OK? 00:00:08.330 --> 00:00:10.160 align:middle line:90% Yep. 00:00:10.160 --> 00:00:10.660 align:middle line:90% OK. 00:00:10.660 --> 00:00:12.860 align:middle line:84% So I can't see if the slides are up. 00:00:12.860 --> 00:00:15.340 align:middle line:84% But if we just turn to slide 2, which 00:00:15.340 --> 00:00:17.935 align:middle line:84% highlights the performance for the company. 00:00:17.935 --> 00:00:25.390 align:middle line:90% 00:00:25.390 --> 00:00:26.760 align:middle line:90% Can you-- so I don't have-- 00:00:26.760 --> 00:00:28.920 align:middle line:84% I can't see if the slides are presented. 00:00:28.920 --> 00:00:31.350 align:middle line:90% Are we on slide 2? 00:00:31.350 --> 00:00:33.428 align:middle line:90% Yeah. 00:00:33.428 --> 00:00:34.740 align:middle line:90% Yeah. 00:00:34.740 --> 00:00:36.120 align:middle line:90% OK, great. 00:00:36.120 --> 00:00:40.140 align:middle line:84% Well, thank you, everyone, for coming. 00:00:40.140 --> 00:00:42.630 align:middle line:84% We'll start here with a review of the performance 00:00:42.630 --> 00:00:44.370 align:middle line:90% for the fiscal year. 00:00:44.370 --> 00:00:46.360 align:middle line:84% You can see, over the one-year period, 00:00:46.360 --> 00:00:51.340 align:middle line:84% the company outperformed the index by nearly 5%. 00:00:51.340 --> 00:00:55.260 align:middle line:84% And again, I think one thing that we're very pleased about 00:00:55.260 --> 00:00:59.730 align:middle line:84% is over a three-year, five-year, 10-year, and since inception, 00:00:59.730 --> 00:01:02.190 align:middle line:84% since launch, the company the fund 00:01:02.190 --> 00:01:06.310 align:middle line:84% has outperformed the index over every single period. 00:01:06.310 --> 00:01:09.270 align:middle line:84% And you can see the calendar year performance-- 00:01:09.270 --> 00:01:11.370 align:middle line:84% this is not fiscal year, calendar year-- 00:01:11.370 --> 00:01:16.950 align:middle line:84% but you can see, for the last 10 years, roughly, 00:01:16.950 --> 00:01:20.400 align:middle line:84% the fund has outperformed the index nearly every year. 00:01:20.400 --> 00:01:24.420 align:middle line:84% And in those years where the fund didn't outperform, 00:01:24.420 --> 00:01:27.400 align:middle line:84% it was slightly below the index level. 00:01:27.400 --> 00:01:30.810 align:middle line:90% So that was in 2020 and in 2014. 00:01:30.810 --> 00:01:35.610 align:middle line:84% So I think we are very pleased with the consistency 00:01:35.610 --> 00:01:39.720 align:middle line:84% of the outperformance over such a long period. 00:01:39.720 --> 00:01:41.880 align:middle line:84% If we can just turn to slide 3, please. 00:01:41.880 --> 00:01:45.110 align:middle line:90% 00:01:45.110 --> 00:01:47.720 align:middle line:84% Slide 3 highlights the attribution 00:01:47.720 --> 00:01:50.700 align:middle line:90% on a country and sector level. 00:01:50.700 --> 00:01:53.930 align:middle line:84% So you can see that for the fiscal year ending September 00:01:53.930 --> 00:01:59.540 align:middle line:84% 30, 2023, that China, Korea, Taiwan, and India and Hong 00:01:59.540 --> 00:02:02.990 align:middle line:84% Kong and Indonesia contributed positively 00:02:02.990 --> 00:02:05.090 align:middle line:90% to the fund's performance. 00:02:05.090 --> 00:02:08.400 align:middle line:84% We'll touch on this in a bit more detail. 00:02:08.400 --> 00:02:10.460 align:middle line:84% But this was through a combination 00:02:10.460 --> 00:02:14.210 align:middle line:84% of overweights and underweights within the fund 00:02:14.210 --> 00:02:16.290 align:middle line:90% versus the index. 00:02:16.290 --> 00:02:19.370 align:middle line:84% And you can see, on the right-hand side there, 00:02:19.370 --> 00:02:23.480 align:middle line:84% the large contribution from the consumer discretionary sector. 00:02:23.480 --> 00:02:26.150 align:middle line:84% The consumer discretionary sector 00:02:26.150 --> 00:02:29.780 align:middle line:84% is a broad definition of companies 00:02:29.780 --> 00:02:34.010 align:middle line:84% and individual sectors and industries within Asia. 00:02:34.010 --> 00:02:36.950 align:middle line:84% But to give some color here, this 00:02:36.950 --> 00:02:39.740 align:middle line:90% would include the fund owning-- 00:02:39.740 --> 00:02:42.560 align:middle line:84% being overweight auto manufacturing and auto 00:02:42.560 --> 00:02:45.990 align:middle line:84% manufacturers in India, such as Maruti Suzuki, 00:02:45.990 --> 00:02:50.160 align:middle line:84% as well as being underweight e-commerce companies in China 00:02:50.160 --> 00:02:53.160 align:middle line:84% where the market environment has been extremely competitive, 00:02:53.160 --> 00:02:55.860 align:middle line:84% as well as underweight EV manufacturers 00:02:55.860 --> 00:03:00.060 align:middle line:84% in China, which also has been extremely competitive. 00:03:00.060 --> 00:03:03.720 align:middle line:84% This also includes a number of different names 00:03:03.720 --> 00:03:06.270 align:middle line:84% that are quite niche or maybe have 00:03:06.270 --> 00:03:08.310 align:middle line:90% specific competitive advantages. 00:03:08.310 --> 00:03:10.890 align:middle line:84% And that would include companies like Shenzhou International, 00:03:10.890 --> 00:03:14.400 align:middle line:84% which is a vertically integrated textile manufacturer. 00:03:14.400 --> 00:03:16.110 align:middle line:84% And then if we just kind of move down 00:03:16.110 --> 00:03:19.290 align:middle line:84% some of the sector attribution, utilities 00:03:19.290 --> 00:03:21.810 align:middle line:84% was the second largest contributor. 00:03:21.810 --> 00:03:25.710 align:middle line:84% This was mainly on the basis of owning China Yangtze, which 00:03:25.710 --> 00:03:27.570 align:middle line:90% is a Chinese utility. 00:03:27.570 --> 00:03:32.130 align:middle line:84% And as interest rates continue to fall in China, 00:03:32.130 --> 00:03:35.640 align:middle line:84% stable dividend-paying companies are outperforming. 00:03:35.640 --> 00:03:38.100 align:middle line:84% And then I think it comes as no surprise, 00:03:38.100 --> 00:03:40.740 align:middle line:84% but the holdings in the technology sector 00:03:40.740 --> 00:03:42.750 align:middle line:84% performed strongly throughout the year. 00:03:42.750 --> 00:03:45.690 align:middle line:84% This was mainly a combination of Taiwan Semiconductor, 00:03:45.690 --> 00:03:48.480 align:middle line:90% Samsung Electronics, Hynix. 00:03:48.480 --> 00:03:51.540 align:middle line:84% And these companies have performed well mainly 00:03:51.540 --> 00:03:54.300 align:middle line:84% on the back of a very positive outlook 00:03:54.300 --> 00:03:59.520 align:middle line:84% for high-performance computing related to demand from AI. 00:03:59.520 --> 00:04:03.030 align:middle line:84% And then the fourth leading contributor from a sector basis 00:04:03.030 --> 00:04:04.380 align:middle line:90% was real estate. 00:04:04.380 --> 00:04:07.470 align:middle line:84% This is really a combination of being underweight 00:04:07.470 --> 00:04:10.650 align:middle line:84% Chinese residential real estate developers, as well as Hong 00:04:10.650 --> 00:04:16.589 align:middle line:84% Kong developers, and owning the leading Chinese developer, 00:04:16.589 --> 00:04:20.640 align:middle line:84% which actually outperformed during the fiscal year 00:04:20.640 --> 00:04:24.900 align:middle line:84% despite the very challenging backdrop to that sector. 00:04:24.900 --> 00:04:27.550 align:middle line:84% And then in terms of consumer staples, 00:04:27.550 --> 00:04:33.840 align:middle line:84% this is a mix of companies, including some Chinese consumer 00:04:33.840 --> 00:04:35.910 align:middle line:84% staples companies, as well as being 00:04:35.910 --> 00:04:39.840 align:middle line:84% underweight some more expensive ones in India that derated. 00:04:39.840 --> 00:04:43.170 align:middle line:84% Maybe I'll just touch on the underperformance, briefly, 00:04:43.170 --> 00:04:44.010 align:middle line:90% of Singapore. 00:04:44.010 --> 00:04:47.820 align:middle line:84% You can see there at the bottom left, again, on slide 3, 00:04:47.820 --> 00:04:51.840 align:middle line:84% this was primarily coming from an internet conglomerate that 00:04:51.840 --> 00:04:55.050 align:middle line:84% is headquartered in Singapore called Sea Limited, 00:04:55.050 --> 00:04:57.720 align:middle line:84% but their business is primarily derived 00:04:57.720 --> 00:05:01.950 align:middle line:84% through Southeast Asia in terms of e-commerce and video game 00:05:01.950 --> 00:05:02.700 align:middle line:90% developing. 00:05:02.700 --> 00:05:04.485 align:middle line:90% So we'll just turn to slide 3-- 00:05:04.485 --> 00:05:07.350 align:middle line:90% 00:05:07.350 --> 00:05:08.400 align:middle line:90% that's right, slide 4. 00:05:08.400 --> 00:05:12.100 align:middle line:90% 00:05:12.100 --> 00:05:14.710 align:middle line:84% So here is the performance attribution 00:05:14.710 --> 00:05:16.120 align:middle line:90% on a stock-level basis. 00:05:16.120 --> 00:05:19.210 align:middle line:84% I touched on these briefly already, but in terms 00:05:19.210 --> 00:05:21.430 align:middle line:84% of the contributors, again, a number 00:05:21.430 --> 00:05:23.650 align:middle line:84% of companies within the technology sector 00:05:23.650 --> 00:05:28.510 align:middle line:84% that include SK Hynix, which is a Korean company that produces 00:05:28.510 --> 00:05:33.580 align:middle line:84% memory chips, and their lead in high-bandwidth memory 00:05:33.580 --> 00:05:36.070 align:middle line:84% over their other Korean competitors sons 00:05:36.070 --> 00:05:38.450 align:middle line:90% electronics and US competitors. 00:05:38.450 --> 00:05:40.300 align:middle line:84% This has been a big competitive advantage 00:05:40.300 --> 00:05:44.500 align:middle line:84% in terms of growing demand from servers and AI. 00:05:44.500 --> 00:05:47.710 align:middle line:84% And then I touched on, briefly, the competitive environment 00:05:47.710 --> 00:05:50.230 align:middle line:84% and backdrop in Chinese e-commerce. 00:05:50.230 --> 00:05:52.960 align:middle line:84% And you can see that the fund was underweight names 00:05:52.960 --> 00:05:55.060 align:middle line:90% such as Meituan and JD. 00:05:55.060 --> 00:05:57.550 align:middle line:84% And you can see those stocks fell, respectively, 00:05:57.550 --> 00:06:01.210 align:middle line:84% around 30% to 45% for the fiscal year. 00:06:01.210 --> 00:06:03.820 align:middle line:84% And then I mentioned, earlier, the overweight 00:06:03.820 --> 00:06:05.110 align:middle line:90% in Maruti Suzuki. 00:06:05.110 --> 00:06:07.780 align:middle line:84% The Indian economy has performed very strongly, 00:06:07.780 --> 00:06:10.480 align:middle line:84% and Maruti is a leading auto manufacturer 00:06:10.480 --> 00:06:12.250 align:middle line:90% and dealer in that country. 00:06:12.250 --> 00:06:14.510 align:middle line:84% And then I touched on, also earlier, 00:06:14.510 --> 00:06:15.760 align:middle line:90% some of the technology names-- 00:06:15.760 --> 00:06:18.550 align:middle line:84% Samsung Electronics, Taiwan Semiconductor. 00:06:18.550 --> 00:06:20.710 align:middle line:84% And at the very bottom there is Trip.com. 00:06:20.710 --> 00:06:23.200 align:middle line:84% This is an online travel agency in China. 00:06:23.200 --> 00:06:26.440 align:middle line:84% The stock performed particularly strongly in the first half 00:06:26.440 --> 00:06:29.380 align:middle line:84% of the fiscal year post the reopening 00:06:29.380 --> 00:06:31.870 align:middle line:84% of the Chinese economy when the zero COVID 00:06:31.870 --> 00:06:33.790 align:middle line:90% restrictions were lifted. 00:06:33.790 --> 00:06:37.240 align:middle line:84% If I just touch on some of the detractors briefly, 00:06:37.240 --> 00:06:40.030 align:middle line:84% some of the main names that we touched on already, 00:06:40.030 --> 00:06:41.260 align:middle line:90% Sea Limited. 00:06:41.260 --> 00:06:45.280 align:middle line:84% Sea Limited, again, is a video game developer 00:06:45.280 --> 00:06:46.570 align:middle line:90% and e-commerce company. 00:06:46.570 --> 00:06:50.890 align:middle line:84% This underperformed primarily because of rising competition 00:06:50.890 --> 00:06:54.070 align:middle line:84% from Chinese e-commerce companies growing 00:06:54.070 --> 00:06:55.270 align:middle line:90% in Southeast Asia. 00:06:55.270 --> 00:06:57.370 align:middle line:84% There's a number of companies in China 00:06:57.370 --> 00:06:59.660 align:middle line:84% that also underperformed during the period. 00:06:59.660 --> 00:07:03.370 align:middle line:84% This includes Foshan Haitian, which is-- 00:07:03.370 --> 00:07:06.640 align:middle line:84% they make the leading brand of soy sauce in China. 00:07:06.640 --> 00:07:09.040 align:middle line:84% So you think about, it's like the Kikkoman of China. 00:07:09.040 --> 00:07:10.840 align:middle line:84% And a couple of other names there, 00:07:10.840 --> 00:07:16.160 align:middle line:84% also AIA also have underperformed. 00:07:16.160 --> 00:07:18.590 align:middle line:84% And then maybe I touch on Pinduoduo. 00:07:18.590 --> 00:07:21.570 align:middle line:84% This is a company that you may have heard of. 00:07:21.570 --> 00:07:24.680 align:middle line:84% They are an e-commerce company in China 00:07:24.680 --> 00:07:27.410 align:middle line:84% that focuses on selling cheap goods. 00:07:27.410 --> 00:07:30.710 align:middle line:84% More recently, they have been expanding overseas 00:07:30.710 --> 00:07:33.560 align:middle line:90% through their brand called Temu. 00:07:33.560 --> 00:07:36.620 align:middle line:84% And this company, essentially, is selling cheap goods 00:07:36.620 --> 00:07:38.480 align:middle line:90% into developed markets. 00:07:38.480 --> 00:07:40.760 align:middle line:84% And this business has done very well 00:07:40.760 --> 00:07:44.810 align:middle line:84% as consumers are seen to be downtrading globally. 00:07:44.810 --> 00:07:50.030 align:middle line:84% Those are the main positive highlights for the fiscal year 00:07:50.030 --> 00:07:50.960 align:middle line:90% under review. 00:07:50.960 --> 00:07:55.350 align:middle line:84% I'll just turn to slide 5 briefly. 00:07:55.350 --> 00:08:01.830 align:middle line:84% For the first quarter of the fiscal year 2023, 00:08:01.830 --> 00:08:04.080 align:middle line:90% the fund had a difficult start. 00:08:04.080 --> 00:08:06.540 align:middle line:84% And this has primarily been through a combination 00:08:06.540 --> 00:08:09.330 align:middle line:84% of being underweight India, which has performed very 00:08:09.330 --> 00:08:11.640 align:middle line:84% strongly, and being neutral China, 00:08:11.640 --> 00:08:14.740 align:middle line:84% but stock selection in China was difficult. 00:08:14.740 --> 00:08:18.270 align:middle line:84% This is primarily because of the positions 00:08:18.270 --> 00:08:22.110 align:middle line:84% in the industrial space in China holding overweights 00:08:22.110 --> 00:08:25.110 align:middle line:84% in automation companies and industrial leaders 00:08:25.110 --> 00:08:28.200 align:middle line:84% such as [INAUDIBLE] that have performed poorly and derated 00:08:28.200 --> 00:08:30.690 align:middle line:84% with a poor economic outlook in China, 00:08:30.690 --> 00:08:34.470 align:middle line:84% as well as some consumer discretionary names. 00:08:34.470 --> 00:08:37.860 align:middle line:84% Maruti Suzuki performed poorly in the first quarter. 00:08:37.860 --> 00:08:40.710 align:middle line:84% I'll just turn to slide 6 so you can get a little bit of color 00:08:40.710 --> 00:08:42.318 align:middle line:90% on this. 00:08:42.318 --> 00:08:45.810 align:middle line:84% On the right-hand side would be the top 10 detractors. 00:08:45.810 --> 00:08:47.490 align:middle line:90% I'd also mention Yum China. 00:08:47.490 --> 00:08:49.830 align:middle line:84% Yum China is the franchise operator 00:08:49.830 --> 00:08:53.820 align:middle line:84% of Kentucky Fried Chicken and Pizza Hut in China. 00:08:53.820 --> 00:08:56.070 align:middle line:84% And as I mentioned on the previous slides, 00:08:56.070 --> 00:08:58.750 align:middle line:84% with names like Foshon Haitian, where 00:08:58.750 --> 00:09:02.440 align:middle line:84% they've witnessed increasing competition 00:09:02.440 --> 00:09:05.800 align:middle line:84% and they suffered from downtrading in terms 00:09:05.800 --> 00:09:09.040 align:middle line:84% of individual Chinese consumers and restaurant chains, 00:09:09.040 --> 00:09:11.170 align:middle line:84% we've seen a similar dynamic play out 00:09:11.170 --> 00:09:15.160 align:middle line:84% in the fast food market in China. 00:09:15.160 --> 00:09:19.050 align:middle line:84% I'll just go to slide 8 now in terms of the positioning. 00:09:19.050 --> 00:09:22.790 align:middle line:84% So you can see here, on the top half of the slide, 00:09:22.790 --> 00:09:24.980 align:middle line:90% the fund is overweight. 00:09:24.980 --> 00:09:26.690 align:middle line:84% The largest overweight is technology, 00:09:26.690 --> 00:09:31.100 align:middle line:84% followed by financials, and then consumer discretionary. 00:09:31.100 --> 00:09:32.870 align:middle line:84% And then on the right-hand side, the fund 00:09:32.870 --> 00:09:34.950 align:middle line:84% remains underweight consumer staples. 00:09:34.950 --> 00:09:37.430 align:middle line:84% This has been a long-held underweight, 00:09:37.430 --> 00:09:40.790 align:middle line:84% mainly because we find the sector is overvalued 00:09:40.790 --> 00:09:43.010 align:middle line:90% and growth is relatively low. 00:09:43.010 --> 00:09:46.010 align:middle line:84% And then that's followed by real estate and energy. 00:09:46.010 --> 00:09:48.740 align:middle line:84% I think we touched on the outlook in China 00:09:48.740 --> 00:09:50.690 align:middle line:84% for the residential real estate sector. 00:09:50.690 --> 00:09:55.430 align:middle line:84% We are extremely cautious on the developers themselves 00:09:55.430 --> 00:09:56.990 align:middle line:90% in terms of that sector. 00:09:56.990 --> 00:09:58.970 align:middle line:84% And then energy, we are underweight 00:09:58.970 --> 00:10:02.120 align:middle line:84% mainly because many of the companies within the sector 00:10:02.120 --> 00:10:06.110 align:middle line:90% in Asia have ESG challenges. 00:10:06.110 --> 00:10:08.660 align:middle line:84% And then I just highlight, at the bottom 00:10:08.660 --> 00:10:11.600 align:middle line:84% of page 8, the country positioning. 00:10:11.600 --> 00:10:14.780 align:middle line:84% So Hong Kong is a 2% overweight, but I 00:10:14.780 --> 00:10:17.370 align:middle line:84% would couple that with the underweight in China, which 00:10:17.370 --> 00:10:19.890 align:middle line:90% is 1.6%. 00:10:19.890 --> 00:10:22.320 align:middle line:84% We look at these markets as being combined and not 00:10:22.320 --> 00:10:24.180 align:middle line:90% necessarily unique to Hong Kong. 00:10:24.180 --> 00:10:26.820 align:middle line:84% So many of the Hong Kong-listed companies, 00:10:26.820 --> 00:10:29.430 align:middle line:84% their economics are driven by what's 00:10:29.430 --> 00:10:31.760 align:middle line:90% happening in mainland China. 00:10:31.760 --> 00:10:35.160 align:middle line:84% And the long-standing overweight in Indonesia remains. 00:10:35.160 --> 00:10:38.260 align:middle line:84% We're very optimistic not only on the economy, 00:10:38.260 --> 00:10:41.320 align:middle line:84% but also on the underlying dynamics of the corporates. 00:10:41.320 --> 00:10:44.730 align:middle line:84% The top corporates in Indonesia are very well run. 00:10:44.730 --> 00:10:46.080 align:middle line:90% They're conservatively managed. 00:10:46.080 --> 00:10:47.490 align:middle line:90% They earn high returns. 00:10:47.490 --> 00:10:50.550 align:middle line:84% And they've generated stable, consistent growth. 00:10:50.550 --> 00:10:53.760 align:middle line:84% In Singapore, the main overweight is DBS. 00:10:53.760 --> 00:10:56.590 align:middle line:84% It's a bank which pays a 7% dividend yield. 00:10:56.590 --> 00:10:59.340 align:middle line:84% They have managed this company much better than 00:10:59.340 --> 00:11:02.220 align:middle line:84% in the past in terms of generating better 00:11:02.220 --> 00:11:05.010 align:middle line:84% returns on capital and paying that out to minority 00:11:05.010 --> 00:11:06.870 align:middle line:90% shareholders. 00:11:06.870 --> 00:11:11.370 align:middle line:84% This fund is neutral Korea and Thailand and India, 00:11:11.370 --> 00:11:15.780 align:middle line:84% and as I mentioned, underweight China, underweight Malaysia, 00:11:15.780 --> 00:11:18.320 align:middle line:90% and slightly underweight Taiwan. 00:11:18.320 --> 00:11:21.140 align:middle line:84% And I'll move to the next slide on page 9. 00:11:21.140 --> 00:11:22.610 align:middle line:84% So some of the portfolio positions. 00:11:22.610 --> 00:11:25.370 align:middle line:84% On the left-hand side, these are the top positions 00:11:25.370 --> 00:11:26.390 align:middle line:90% by absolute weight. 00:11:26.390 --> 00:11:29.210 align:middle line:84% So you can see Taiwan Semiconductor 00:11:29.210 --> 00:11:32.210 align:middle line:84% is pushing near a 10% weight in the portfolio. 00:11:32.210 --> 00:11:35.990 align:middle line:84% As I'm sure you're aware, this is a very strongly growing 00:11:35.990 --> 00:11:40.400 align:middle line:84% business, and its index size in the market is growing. 00:11:40.400 --> 00:11:43.610 align:middle line:84% And that's followed by Samsung Electronics, Tencent, 00:11:43.610 --> 00:11:49.010 align:middle line:84% HDFC Bank, AIA, Infosys, Maruti, Axis Bank, Hong Kong Exchange, 00:11:49.010 --> 00:11:51.050 align:middle line:90% and Shenzhou International. 00:11:51.050 --> 00:11:53.420 align:middle line:84% And then in terms of the relative positions, 00:11:53.420 --> 00:11:56.510 align:middle line:84% the active weights are on the right-hand side 00:11:56.510 --> 00:11:59.990 align:middle line:84% there with HDFC, Maruti, Shenzhou, Tencent, 00:11:59.990 --> 00:12:04.520 align:middle line:84% and Axis Bank being the largest overweights or largest bets. 00:12:04.520 --> 00:12:06.650 align:middle line:84% And you can see the top five underweights. 00:12:06.650 --> 00:12:09.140 align:middle line:84% There is zero holding in Alibaba. 00:12:09.140 --> 00:12:12.410 align:middle line:84% I touched on, earlier, our view of the competitive nature 00:12:12.410 --> 00:12:15.920 align:middle line:84% of the e-commerce sector in China, Reliance Industries, 00:12:15.920 --> 00:12:21.030 align:middle line:84% Pinduoduo, ICICI Bank, and China Construction Bank. 00:12:21.030 --> 00:12:23.550 align:middle line:84% If we just turn to the next slide, please. 00:12:23.550 --> 00:12:28.190 align:middle line:90% 00:12:28.190 --> 00:12:31.180 align:middle line:84% Here are the portfolio characteristics. 00:12:31.180 --> 00:12:34.720 align:middle line:84% You can see that the fund has a slight growth 00:12:34.720 --> 00:12:36.640 align:middle line:90% bias versus the index. 00:12:36.640 --> 00:12:39.040 align:middle line:84% So the 12-month price-to-earnings ratio 00:12:39.040 --> 00:12:42.910 align:middle line:84% is 15.5 times versus the benchmark at 12.5 times. 00:12:42.910 --> 00:12:45.370 align:middle line:84% The price-to-book ratio is slightly higher. 00:12:45.370 --> 00:12:47.620 align:middle line:84% The dividend yield is slightly lower. 00:12:47.620 --> 00:12:49.360 align:middle line:90% Return on equity is higher. 00:12:49.360 --> 00:12:51.640 align:middle line:84% And the balance sheets of the companies we hold 00:12:51.640 --> 00:12:52.360 align:middle line:90% are much better. 00:12:52.360 --> 00:12:54.235 align:middle line:84% That's something that we might touch on later 00:12:54.235 --> 00:12:55.517 align:middle line:90% in the Q&A session. 00:12:55.517 --> 00:12:57.850 align:middle line:84% And then you can see there the five-year expected growth 00:12:57.850 --> 00:13:00.190 align:middle line:90% rates are higher. 00:13:00.190 --> 00:13:01.990 align:middle line:84% Our average number of red flags-- this 00:13:01.990 --> 00:13:04.390 align:middle line:84% is an internal proprietary research framework 00:13:04.390 --> 00:13:07.690 align:middle line:84% that we use to determine a company's governance, 00:13:07.690 --> 00:13:09.200 align:middle line:90% economics, and duration. 00:13:09.200 --> 00:13:11.200 align:middle line:84% And you can see that the average company we hold 00:13:11.200 --> 00:13:14.830 align:middle line:84% has a lower number of red flags compared to the index. 00:13:14.830 --> 00:13:20.020 align:middle line:84% And this also corresponds to the lower MSCI carbon intensity. 00:13:20.020 --> 00:13:23.560 align:middle line:84% And then just below that, you can see the number of issuers 00:13:23.560 --> 00:13:26.800 align:middle line:84% is around 60, the active share is near 70%, 00:13:26.800 --> 00:13:30.582 align:middle line:84% the predicted tracking error is 3.5%, and the beta is 1. 00:13:30.582 --> 00:13:32.290 align:middle line:84% In terms of the strategic classification, 00:13:32.290 --> 00:13:35.140 align:middle line:84% I think this is a framework that most of you are familiar with. 00:13:35.140 --> 00:13:37.780 align:middle line:84% You can see that we are overweight premium companies 00:13:37.780 --> 00:13:40.480 align:middle line:84% and quality companies and underweight trading companies. 00:13:40.480 --> 00:13:42.610 align:middle line:84% And on the bottom there, the fund 00:13:42.610 --> 00:13:46.180 align:middle line:84% is overweight mega-caps, underweight midcaps, 00:13:46.180 --> 00:13:47.635 align:middle line:90% and overweight large caps. 00:13:47.635 --> 00:13:50.450 align:middle line:90% 00:13:50.450 --> 00:13:55.100 align:middle line:84% I think I'll stop there for IAS to take the market outlook. 00:13:55.100 --> 00:14:01.280 align:middle line:90% 00:14:01.280 --> 00:14:02.200 align:middle line:90% Thank you, Rob. 00:14:02.200 --> 00:14:02.990 align:middle line:90% Good morning all. 00:14:02.990 --> 00:14:04.270 align:middle line:90% Thank you all for being here. 00:14:04.270 --> 00:14:06.460 align:middle line:84% And over the next few minutes, I will 00:14:06.460 --> 00:14:09.160 align:middle line:84% give an overview of what our outlook is now 00:14:09.160 --> 00:14:11.740 align:middle line:84% for the Asia investment trust, and obviously, 00:14:11.740 --> 00:14:13.600 align:middle line:90% an outlook for the region. 00:14:13.600 --> 00:14:19.320 align:middle line:84% Just to begin with, this is what we call our heat map dashboard. 00:14:19.320 --> 00:14:21.690 align:middle line:84% I'm not going to go through each thing in individually, 00:14:21.690 --> 00:14:23.220 align:middle line:84% but use this page, actually, just 00:14:23.220 --> 00:14:26.190 align:middle line:84% to give a broad outlook of what we think about the region. 00:14:26.190 --> 00:14:28.560 align:middle line:84% If we're looking at 2024, basically, green 00:14:28.560 --> 00:14:31.965 align:middle line:84% means good, yellow, not so bad, orange, 00:14:31.965 --> 00:14:34.080 align:middle line:90% sort of improving a bit. 00:14:34.080 --> 00:14:36.610 align:middle line:84% But to put that into a story, first of all, 00:14:36.610 --> 00:14:39.750 align:middle line:84% in terms of growth, we're looking at growth in Asia, 00:14:39.750 --> 00:14:42.550 align:middle line:84% looking to pick up actually in the next couple of years. 00:14:42.550 --> 00:14:45.240 align:middle line:84% And I think that's best illustrated by earnings 00:14:45.240 --> 00:14:47.100 align:middle line:90% as opposed to GDP growth. 00:14:47.100 --> 00:14:49.800 align:middle line:84% Last year, earnings for the region-- 00:14:49.800 --> 00:14:52.620 align:middle line:84% this is ex-Japan-- was about flat. 00:14:52.620 --> 00:14:56.370 align:middle line:84% This year, we're actually forecasting about 20%/21% 00:14:56.370 --> 00:14:57.310 align:middle line:90% earnings growth. 00:14:57.310 --> 00:15:01.530 align:middle line:84% So quite a decent pickup in earnings growth in the region. 00:15:01.530 --> 00:15:04.470 align:middle line:84% Second, what's also very positive 00:15:04.470 --> 00:15:06.150 align:middle line:90% is in terms of valuations. 00:15:06.150 --> 00:15:09.150 align:middle line:84% Valuations in Asia today are trading just 00:15:09.150 --> 00:15:10.810 align:middle line:90% below its long-term average. 00:15:10.810 --> 00:15:14.550 align:middle line:84% So both from a PE level, from a price to book level, 00:15:14.550 --> 00:15:16.900 align:middle line:84% and even in our own internal signals, 00:15:16.900 --> 00:15:20.530 align:middle line:84% which we measure forecasts over a five-year period, 00:15:20.530 --> 00:15:22.870 align:middle line:84% Asia is trading at a bit of a discount 00:15:22.870 --> 00:15:24.200 align:middle line:90% to its long term average. 00:15:24.200 --> 00:15:26.020 align:middle line:90% So growth is coming back. 00:15:26.020 --> 00:15:28.090 align:middle line:90% Valuations are attractive. 00:15:28.090 --> 00:15:32.410 align:middle line:84% Also, very importantly, if we believe that US dollar interest 00:15:32.410 --> 00:15:35.590 align:middle line:84% rates are going to start flattening out and easing, 00:15:35.590 --> 00:15:38.470 align:middle line:84% this has generally been very positive for the Asian 00:15:38.470 --> 00:15:40.190 align:middle line:90% and emerging market region. 00:15:40.190 --> 00:15:44.110 align:middle line:84% So we've got positive tailwinds coupled with valuations 00:15:44.110 --> 00:15:45.320 align:middle line:90% and growth coming back. 00:15:45.320 --> 00:15:48.010 align:middle line:84% So generally, a pretty positive picture. 00:15:48.010 --> 00:15:50.140 align:middle line:84% Maybe it's also worth highlighting, though, what 00:15:50.140 --> 00:15:52.060 align:middle line:90% are the risks to that scenario? 00:15:52.060 --> 00:15:53.000 align:middle line:90% One. 00:15:53.000 --> 00:15:56.440 align:middle line:84% There's no doubt China, in terms of, especially, its property 00:15:56.440 --> 00:16:00.250 align:middle line:84% side, is a bit of an overhang on the economy today. 00:16:00.250 --> 00:16:02.260 align:middle line:90% We have to see how that evolves. 00:16:02.260 --> 00:16:05.050 align:middle line:84% We believe that the government will intervene 00:16:05.050 --> 00:16:08.890 align:middle line:84% in some sort of measures of setting up a bank 00:16:08.890 --> 00:16:12.730 align:middle line:84% to buy up bad loans and so on to take it out of the system 00:16:12.730 --> 00:16:16.330 align:middle line:84% and isolate it so that the system can go back 00:16:16.330 --> 00:16:19.210 align:middle line:84% to real growth in that area and stabilize it. 00:16:19.210 --> 00:16:21.220 align:middle line:84% We'll have to see what happens over there. 00:16:21.220 --> 00:16:24.070 align:middle line:84% But importantly, China, in many other areas, 00:16:24.070 --> 00:16:26.740 align:middle line:84% as Rob pointed out, we've got great corporate earnings 00:16:26.740 --> 00:16:28.090 align:middle line:90% coming out from various sectors. 00:16:28.090 --> 00:16:30.260 align:middle line:84% And I'll touch on that in a little while. 00:16:30.260 --> 00:16:32.047 align:middle line:84% But we have to see how that evolves. 00:16:32.047 --> 00:16:33.880 align:middle line:84% The other thing is also on the interest rate 00:16:33.880 --> 00:16:35.140 align:middle line:90% scenario and inflation. 00:16:35.140 --> 00:16:38.020 align:middle line:84% Our base case today is that inflation 00:16:38.020 --> 00:16:40.970 align:middle line:84% is starting to stabilize and starting to ease. 00:16:40.970 --> 00:16:42.438 align:middle line:84% And that will allow interest rates 00:16:42.438 --> 00:16:44.230 align:middle line:84% to come down, which is what the markets are 00:16:44.230 --> 00:16:45.490 align:middle line:90% sort of anticipating. 00:16:45.490 --> 00:16:48.640 align:middle line:84% If inflation proves to be persistent 00:16:48.640 --> 00:16:51.220 align:middle line:84% and interest rates stay high, that obviously 00:16:51.220 --> 00:16:54.020 align:middle line:84% has an implication on equity markets as a whole, 00:16:54.020 --> 00:16:56.450 align:middle line:84% not only to Asia, but probably the US as well. 00:16:56.450 --> 00:17:00.550 align:middle line:84% And that's something to bear in mind as well. 00:17:00.550 --> 00:17:03.630 align:middle line:84% Moving forward, just touching on China, 00:17:03.630 --> 00:17:06.210 align:middle line:84% the left-hand chart is showing that there 00:17:06.210 --> 00:17:09.420 align:middle line:84% are issues in terms of fixed asset investment, which, 00:17:09.420 --> 00:17:11.910 align:middle line:84% a lot of it is driven by an overhang of the property 00:17:11.910 --> 00:17:12.960 align:middle line:90% sector. 00:17:12.960 --> 00:17:16.319 align:middle line:84% And that remains something that we have to watch out for. 00:17:16.319 --> 00:17:20.640 align:middle line:84% Consumption, on the right-hand side, is starting to tick up. 00:17:20.640 --> 00:17:24.839 align:middle line:84% In complete honesty, it hasn't recovered as fast and as rapid 00:17:24.839 --> 00:17:27.990 align:middle line:84% as we thought that might happen after the COVID 00:17:27.990 --> 00:17:29.760 align:middle line:90% restrictions were eased. 00:17:29.760 --> 00:17:33.060 align:middle line:84% But certainly, all the data that's coming out today 00:17:33.060 --> 00:17:35.910 align:middle line:84% is suggesting it's all improving and it's getting 00:17:35.910 --> 00:17:38.970 align:middle line:90% back close to pre-COVID levels. 00:17:38.970 --> 00:17:42.870 align:middle line:84% Interesting to see tourist movements in China 00:17:42.870 --> 00:17:44.730 align:middle line:90% are getting much higher again. 00:17:44.730 --> 00:17:48.030 align:middle line:84% Domestic consumer consumption is getting better, 00:17:48.030 --> 00:17:51.700 align:middle line:84% but we still need to see stronger numbers over there. 00:17:51.700 --> 00:17:54.720 align:middle line:84% But in terms of earnings, just to point out, 00:17:54.720 --> 00:17:58.020 align:middle line:84% last year, earnings growth in China as a whole for the market 00:17:58.020 --> 00:17:59.710 align:middle line:90% was about 12%. 00:17:59.710 --> 00:18:03.260 align:middle line:84% The forecast for the current year is about 15%. 00:18:03.260 --> 00:18:05.110 align:middle line:84% So even though there are softness 00:18:05.110 --> 00:18:08.410 align:middle line:84% in certain parts of China, there are corporates that are still 00:18:08.410 --> 00:18:10.120 align:middle line:90% producing good earnings. 00:18:10.120 --> 00:18:13.780 align:middle line:84% And this is particularly in the technology space, 00:18:13.780 --> 00:18:16.570 align:middle line:84% in the whole energy transformation space, 00:18:16.570 --> 00:18:18.700 align:middle line:84% and even in the consumption space. 00:18:18.700 --> 00:18:22.840 align:middle line:84% So China today is very, very cheap as well. 00:18:22.840 --> 00:18:24.970 align:middle line:90% It's trading at 1 times book-- 00:18:24.970 --> 00:18:28.520 align:middle line:84% or 1 times 1 times-- sorry, 1.1 times book, 00:18:28.520 --> 00:18:30.940 align:middle line:84% which is the cheapest it has been 00:18:30.940 --> 00:18:33.080 align:middle line:84% since the Asian financial crisis. 00:18:33.080 --> 00:18:36.400 align:middle line:84% So we believe a lot of the bad news is in the price, 00:18:36.400 --> 00:18:38.650 align:middle line:84% and from a bottom-up level, there are actually 00:18:38.650 --> 00:18:40.045 align:middle line:90% great opportunities still. 00:18:40.045 --> 00:18:42.710 align:middle line:90% 00:18:42.710 --> 00:18:46.280 align:middle line:84% In terms of earnings in general for Asia-Pacific, 00:18:46.280 --> 00:18:47.930 align:middle line:84% I mentioned the numbers earlier on, 00:18:47.930 --> 00:18:50.660 align:middle line:84% that we are forecasting a recovery to about 20% 00:18:50.660 --> 00:18:52.310 align:middle line:90% from being flat last year. 00:18:52.310 --> 00:18:55.320 align:middle line:84% This chart is just showing earnings revisions, 00:18:55.320 --> 00:18:58.640 align:middle line:84% which is showing earnings revisions upwards compared 00:18:58.640 --> 00:19:00.560 align:middle line:90% to earnings revisions downwards. 00:19:00.560 --> 00:19:03.410 align:middle line:84% Generally, a rising line is good-- 00:19:03.410 --> 00:19:06.290 align:middle line:90% a negative line is bad. 00:19:06.290 --> 00:19:09.290 align:middle line:84% We are seeing green shoots of earnings recovery, 00:19:09.290 --> 00:19:12.290 align:middle line:84% and certainly, from a bottom-up level, when we visit companies, 00:19:12.290 --> 00:19:15.720 align:middle line:84% we are seeing that the outlook is looking much better. 00:19:15.720 --> 00:19:17.780 align:middle line:84% But this is obviously something we will monitor, 00:19:17.780 --> 00:19:20.420 align:middle line:84% but the outlook is definitely higher earnings 00:19:20.420 --> 00:19:24.750 align:middle line:84% growth into this year, and hopefully, next year as well. 00:19:24.750 --> 00:19:27.830 align:middle line:84% This is just showing valuations pictorially. 00:19:27.830 --> 00:19:30.230 align:middle line:84% On the left-hand side is price to book. 00:19:30.230 --> 00:19:32.730 align:middle line:84% As I mentioned, it's below the long-term average. 00:19:32.730 --> 00:19:34.400 align:middle line:90% So it's on the cheaper side. 00:19:34.400 --> 00:19:37.740 align:middle line:84% The right-hand side is just our own internal signals, 00:19:37.740 --> 00:19:39.410 align:middle line:84% which is suggesting, again, that it's 00:19:39.410 --> 00:19:41.330 align:middle line:84% trading on the cheaper side compared 00:19:41.330 --> 00:19:44.730 align:middle line:90% to its five-year average. 00:19:44.730 --> 00:19:49.560 align:middle line:84% In terms of individual markets, on the left-hand side 00:19:49.560 --> 00:19:53.520 align:middle line:84% is showing our forecast, in terms of countries, 00:19:53.520 --> 00:19:56.160 align:middle line:84% of expected returns of each country, 00:19:56.160 --> 00:19:59.490 align:middle line:84% which is a combination of earnings growth, 00:19:59.490 --> 00:20:03.090 align:middle line:84% valuations, and so on over a five-year period. 00:20:03.090 --> 00:20:06.360 align:middle line:84% China, as you can see, which I suggested 00:20:06.360 --> 00:20:09.730 align:middle line:84% by saying it's very cheap, is looking very attractive. 00:20:09.730 --> 00:20:11.760 align:middle line:84% There are obviously still risks involved, 00:20:11.760 --> 00:20:15.040 align:middle line:84% but that's one of the reasons why it is trading very cheap. 00:20:15.040 --> 00:20:17.220 align:middle line:84% So we are being very diligent about making 00:20:17.220 --> 00:20:21.270 align:middle line:84% sure we have the right opportunities in the portfolio. 00:20:21.270 --> 00:20:23.550 align:middle line:84% In terms of the others, Taiwan is also 00:20:23.550 --> 00:20:27.730 align:middle line:84% looking attractive, Hong Kong, Indonesia, and Korea as well. 00:20:27.730 --> 00:20:29.590 align:middle line:84% These are all relative to each other. 00:20:29.590 --> 00:20:32.880 align:middle line:84% The ones that are the bottom, in terms of, like, India, 00:20:32.880 --> 00:20:34.410 align:middle line:90% by itself, it's looking fine. 00:20:34.410 --> 00:20:36.390 align:middle line:84% But when you stack it up against the rest 00:20:36.390 --> 00:20:39.630 align:middle line:84% of the Asian countries, the expected returns 00:20:39.630 --> 00:20:43.230 align:middle line:84% are lower than the rest but fundamentally still very sound. 00:20:43.230 --> 00:20:46.850 align:middle line:84% So on this, as Rob already pointed out, 00:20:46.850 --> 00:20:49.420 align:middle line:90% we are overweight Korea. 00:20:49.420 --> 00:20:51.310 align:middle line:90% We're overweight Indonesia. 00:20:51.310 --> 00:20:53.620 align:middle line:84% If we look at China/Hong Kong combined, 00:20:53.620 --> 00:20:58.670 align:middle line:84% we also actually have a small overweight there as well. 00:20:58.670 --> 00:21:02.330 align:middle line:84% Maybe just moving on in terms of some themes 00:21:02.330 --> 00:21:04.520 align:middle line:84% and maybe just touching on some stocks. 00:21:04.520 --> 00:21:08.240 align:middle line:84% We are overweight the financial sector, 00:21:08.240 --> 00:21:10.310 align:middle line:90% as Rob has already mentioned. 00:21:10.310 --> 00:21:12.020 align:middle line:84% And there are a few reasons for this. 00:21:12.020 --> 00:21:16.220 align:middle line:84% And the one big theme here is this continuous financial 00:21:16.220 --> 00:21:19.070 align:middle line:90% deepening in the Asian region. 00:21:19.070 --> 00:21:23.940 align:middle line:84% There's still underpenetration in terms of the banking system. 00:21:23.940 --> 00:21:27.680 align:middle line:84% And this will continue to grow as Asia continues 00:21:27.680 --> 00:21:29.180 align:middle line:90% to become very prosperous. 00:21:29.180 --> 00:21:32.180 align:middle line:84% So we take the left-hand side, first of all. 00:21:32.180 --> 00:21:35.300 align:middle line:84% That's showing, basically, insurance penetration. 00:21:35.300 --> 00:21:37.680 align:middle line:84% I know-- sorry, it's a little bit difficult to read. 00:21:37.680 --> 00:21:38.240 align:middle line:90% I apologize. 00:21:38.240 --> 00:21:42.980 align:middle line:84% But simply put, as GDP per capita continues to grow, 00:21:42.980 --> 00:21:46.290 align:middle line:84% there's a strong correlation between higher GDP 00:21:46.290 --> 00:21:50.120 align:middle line:84% per capita and percentage of ownership 00:21:50.120 --> 00:21:51.600 align:middle line:90% of insurance products. 00:21:51.600 --> 00:21:56.490 align:middle line:84% And I think we all agree that places like China, Indonesia, 00:21:56.490 --> 00:21:59.880 align:middle line:84% India, et cetera, is that GDP per capita 00:21:59.880 --> 00:22:02.340 align:middle line:84% is going to continue to grow, and therefore, there 00:22:02.340 --> 00:22:04.770 align:middle line:84% are great opportunities for the insurance sector. 00:22:04.770 --> 00:22:07.980 align:middle line:84% Hence, some are overweights in those areas, 00:22:07.980 --> 00:22:11.760 align:middle line:84% in AIA, for instance, which benefits from growing insurance 00:22:11.760 --> 00:22:13.860 align:middle line:90% penetration in the region. 00:22:13.860 --> 00:22:15.700 align:middle line:90% Banking as well. 00:22:15.700 --> 00:22:18.330 align:middle line:84% If we look at the middle chart, the green 00:22:18.330 --> 00:22:24.540 align:middle line:84% is actually-- the green is showing the unbanked percentage 00:22:24.540 --> 00:22:26.640 align:middle line:90% of population in each country. 00:22:26.640 --> 00:22:29.280 align:middle line:84% As you can see in Indonesia particularly, which 00:22:29.280 --> 00:22:31.140 align:middle line:84% is in the middle part, there's still 00:22:31.140 --> 00:22:34.380 align:middle line:84% a very high percentage of the population that's unbanked. 00:22:34.380 --> 00:22:37.140 align:middle line:84% And then you can draw that analogy with many others. 00:22:37.140 --> 00:22:41.640 align:middle line:84% Singapore, which is the most developed city in that chart, 00:22:41.640 --> 00:22:43.860 align:middle line:84% blue means percentage that's already banked. 00:22:43.860 --> 00:22:46.620 align:middle line:84% And we believe that the other countries around there 00:22:46.620 --> 00:22:50.310 align:middle line:84% will continue to move to the Singapore average, which, 00:22:50.310 --> 00:22:52.200 align:middle line:84% again, really benefits the banking 00:22:52.200 --> 00:22:53.940 align:middle line:90% companies in the region. 00:22:53.940 --> 00:22:58.500 align:middle line:84% And examples of that are things like HDFC Bank in India, BCA, 00:22:58.500 --> 00:23:00.960 align:middle line:90% which Rob already mentioned. 00:23:00.960 --> 00:23:04.620 align:middle line:84% Both great managed banks, very strong balance sheets, 00:23:04.620 --> 00:23:06.840 align:middle line:84% great management, great visibility 00:23:06.840 --> 00:23:08.820 align:middle line:84% in earnings over multi-year periods, 00:23:08.820 --> 00:23:12.060 align:middle line:84% and compounding for shareholders. 00:23:12.060 --> 00:23:15.750 align:middle line:84% Lastly, on this example, in terms of financial services, 00:23:15.750 --> 00:23:18.300 align:middle line:84% we've got an example here for Hong Kong exchange, 00:23:18.300 --> 00:23:21.390 align:middle line:84% which is the stock exchange of Hong Kong. 00:23:21.390 --> 00:23:22.980 align:middle line:84% There's a trend line that you can 00:23:22.980 --> 00:23:27.160 align:middle line:84% see where average daily turnover continues to increase. 00:23:27.160 --> 00:23:29.730 align:middle line:84% And we believe, as China continues to grow, 00:23:29.730 --> 00:23:33.180 align:middle line:84% which it will, and the connectivity 00:23:33.180 --> 00:23:37.290 align:middle line:84% between Hong Kong and China, the turnover in the Hong Kong 00:23:37.290 --> 00:23:43.410 align:middle line:84% exchange is going to continue to grow and benefit shareholders. 00:23:43.410 --> 00:23:47.260 align:middle line:84% Couple of stock examples of what we hold just to finish off. 00:23:47.260 --> 00:23:49.930 align:middle line:90% Sorry to belabor the point. 00:23:49.930 --> 00:23:52.210 align:middle line:84% Bank Central Asia, which is BCA, I 00:23:52.210 --> 00:23:54.070 align:middle line:90% think we talked about it enough. 00:23:54.070 --> 00:23:59.080 align:middle line:84% But this is just showing in terms, again, of bank accounts 00:23:59.080 --> 00:24:02.080 align:middle line:84% as a percentage of the population above 15 00:24:02.080 --> 00:24:04.340 align:middle line:84% of China, Indonesia, India, Malaysia, 00:24:04.340 --> 00:24:07.120 align:middle line:90% Thailand, and Philippines. 00:24:07.120 --> 00:24:09.610 align:middle line:84% As you can see, it has continued to grow. 00:24:09.610 --> 00:24:14.420 align:middle line:84% But Indonesia certainly still has a lot more to go. 00:24:14.420 --> 00:24:19.060 align:middle line:84% And we are particularly very positive on BCA as a result. 00:24:19.060 --> 00:24:22.770 align:middle line:84% Another area that we do like is tech hardware. 00:24:22.770 --> 00:24:26.370 align:middle line:84% And must admit, although there is a lot of news 00:24:26.370 --> 00:24:29.640 align:middle line:84% and a lot of positivity on AI, we 00:24:29.640 --> 00:24:32.370 align:middle line:84% think that news is actually very justified. 00:24:32.370 --> 00:24:35.820 align:middle line:84% There is a lot of things happening in the AI space, 00:24:35.820 --> 00:24:37.620 align:middle line:84% and there are certainly companies in Asia 00:24:37.620 --> 00:24:40.050 align:middle line:90% that are benefiting from it. 00:24:40.050 --> 00:24:44.760 align:middle line:84% The left-hand chart is showing the number of AI server 00:24:44.760 --> 00:24:48.690 align:middle line:84% volumes, how it's growing and how it's forecast to grow. 00:24:48.690 --> 00:24:51.300 align:middle line:84% Now, what does that mean for certain companies in Asia? 00:24:51.300 --> 00:24:54.210 align:middle line:90% And we use TSMC as an example. 00:24:54.210 --> 00:24:56.610 align:middle line:84% It's a leading tech manufacturer-- semiconductor 00:24:56.610 --> 00:25:00.090 align:middle line:90% manufacturer-- in Taiwan. 00:25:00.090 --> 00:25:03.930 align:middle line:84% Essentially, 40% of TSMC's production 00:25:03.930 --> 00:25:08.070 align:middle line:84% is actually at the high-end chips. 00:25:08.070 --> 00:25:11.760 align:middle line:84% And these are what are used in AI servers. 00:25:11.760 --> 00:25:15.630 align:middle line:84% So companies like TSMC are a great beneficiary 00:25:15.630 --> 00:25:18.730 align:middle line:84% as AI continues to develop, and certainly, 00:25:18.730 --> 00:25:22.950 align:middle line:84% is a big holding for us in your trust. 00:25:22.950 --> 00:25:26.730 align:middle line:84% Lastly, again, in the technology space, 00:25:26.730 --> 00:25:30.390 align:middle line:84% there's a company called Largan, which is based in Taiwan. 00:25:30.390 --> 00:25:33.930 align:middle line:84% It's essentially a leading mobile lens maker. 00:25:33.930 --> 00:25:36.660 align:middle line:84% So as you all know, these mobile phones 00:25:36.660 --> 00:25:40.230 align:middle line:84% have become very sophisticated in the camera function. 00:25:40.230 --> 00:25:41.880 align:middle line:84% This chart is actually showing, now, 00:25:41.880 --> 00:25:46.380 align:middle line:84% the content of how much of a camera 00:25:46.380 --> 00:25:49.110 align:middle line:90% is now in a mobile phone. 00:25:49.110 --> 00:25:52.680 align:middle line:84% And essentially, it's become roughly about 20% 00:25:52.680 --> 00:25:54.360 align:middle line:90% of your average iPhone. 00:25:54.360 --> 00:25:58.050 align:middle line:84% And as each iPhone comes out, it generally-- that content 00:25:58.050 --> 00:26:01.590 align:middle line:84% continues to get higher and higher, of the camera. 00:26:01.590 --> 00:26:05.140 align:middle line:84% And Largan is a leading producer of the lens in the camera. 00:26:05.140 --> 00:26:07.020 align:middle line:84% And again, we think this is a company that 00:26:07.020 --> 00:26:10.890 align:middle line:84% is a big beneficiary as we continue to see development 00:26:10.890 --> 00:26:14.620 align:middle line:90% in the mobile phone space. 00:26:14.620 --> 00:26:17.220 align:middle line:84% So with that, I'm going to close off 00:26:17.220 --> 00:26:21.210 align:middle line:84% by just saying that Asia has had a bit of a difficult year 00:26:21.210 --> 00:26:23.310 align:middle line:90% or so. 00:26:23.310 --> 00:26:26.380 align:middle line:84% Frankly, China has been an issue there. 00:26:26.380 --> 00:26:28.860 align:middle line:84% We've seen a lot of softness in China 00:26:28.860 --> 00:26:32.400 align:middle line:90% led by the real estate side. 00:26:32.400 --> 00:26:35.110 align:middle line:84% There have been geopolitical tensions as well. 00:26:35.110 --> 00:26:37.110 align:middle line:84% And certainly, government regulatory issues 00:26:37.110 --> 00:26:40.260 align:middle line:84% have also been a little bit uncertain. 00:26:40.260 --> 00:26:42.900 align:middle line:84% Maybe just commenting on that, we certainly 00:26:42.900 --> 00:26:46.350 align:middle line:84% believe that the Chinese policymakers want 00:26:46.350 --> 00:26:50.430 align:middle line:84% a balance between, shall we say, common prosperity, 00:26:50.430 --> 00:26:54.330 align:middle line:84% but also want the economy to continue to grow, 00:26:54.330 --> 00:26:56.730 align:middle line:84% as it needs to, for social stability 00:26:56.730 --> 00:26:58.960 align:middle line:90% and to bring up the population. 00:26:58.960 --> 00:27:02.520 align:middle line:84% We've seen strong evidence, with some of the policy flip-flops, 00:27:02.520 --> 00:27:05.250 align:middle line:84% that the policy makers have actually now understood 00:27:05.250 --> 00:27:07.890 align:middle line:84% some of the issues and are taking proper action 00:27:07.890 --> 00:27:09.880 align:middle line:90% to regain investor confidence. 00:27:09.880 --> 00:27:12.900 align:middle line:84% And I'm not talking about just equity investor confidence. 00:27:12.900 --> 00:27:15.700 align:middle line:84% We're talking about local investors who 00:27:15.700 --> 00:27:18.700 align:middle line:84% are investing in corporates, in plant and machinery, 00:27:18.700 --> 00:27:21.380 align:middle line:84% and to get their confidence back again. 00:27:21.380 --> 00:27:25.420 align:middle line:84% We believe, as we said, in terms of price, valuations, 00:27:25.420 --> 00:27:27.410 align:middle line:90% a lot of that bad news is there. 00:27:27.410 --> 00:27:29.560 align:middle line:84% And I think we are well-positioned in the fund 00:27:29.560 --> 00:27:32.890 align:middle line:84% to take advantage of, hopefully, a recovery in that area. 00:27:32.890 --> 00:27:36.970 align:middle line:84% Generally, the environment looks positive with the risk 00:27:36.970 --> 00:27:40.390 align:middle line:84% that the economy in China continues to soften. 00:27:40.390 --> 00:27:41.860 align:middle line:90% That may have an impact. 00:27:41.860 --> 00:27:44.950 align:middle line:84% But we are confident, our base case scenario, 00:27:44.950 --> 00:27:48.110 align:middle line:84% that we will see stabilization in the recovery from here. 00:27:48.110 --> 00:27:50.070 align:middle line:90% Thank you. 00:27:50.070 --> 00:28:07.000 align:middle line:90%