Asia high conviction equities
As it grows, Asia is transforming – creating potential opportunities for discerning investors.
Driven by a rising middle class and an economic shift from manufacturing to services, business models and consumption patterns are changing. Some companies may prosper, others may fade away.
Lombard Odier Investment Managers takes a highly selective approach, focusing on the sectors and companies it expects to benefit most from Asia’s evolution.
Investing for the long-term, we put sustainability at the heart of our process.1
Asia: growth and transformation-
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Growth engine
Asia ex-Japan could contribute 30% of global consumption growth from 2015-2030.2
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Structural change
Driven by a rising middle class, business models and consumer demand trends are changing.
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Winners and losers
As Asian economies shift towards services, select sectors and companies may prosper.
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Under-represented Asia ex-Japan is under-represented in global equity indices, relative to its share of the overall market.3 |
why invest?
Asia is growing and evolving. We believe a focused approach is key to seizing the opportunities and managing risks.
Fast growth, profound change
Asia ex-Japan is forecast to grow faster than the rest of the world5, creating diverse opportunities for investors. However, global equity indices offer limited exposure to the region.6
Asia is also changing. We believe the financials, technology and consumer sectors are likely to be key beneficiaries of Asia’s transformation. Other sectors face structural headwinds as business models, lifestyles and demand patterns change.
We believe a highly-selective investment approach centred on sustainability is vital.
Selective and diverse
We target attractively-priced companies generating excess economic returns7 – and aim to avoid structurally-challenged business models.
To navigate economic cycles, we diversify across three themes:
- Highly profitable businesses with dominant, defensible market positions
- Businesses with high growth potential
- Corporate event candidates, such as businesses that may be acquired or merged
investment team.
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Dhiraj Bajaj CIO, Asia Fixed Income and Equity |
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Wee Jia Low |
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Ashley Chung Co-Portfolio Manager |
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Faye Gao Co-Portfolio Manager |
investment strategy and philosophy.
At Lombard Odier Investment Managers, we believe sustainability will drive future return potential.8
We adopt a three-pillar approach to finding sustainable businesses, looking for those with sustainable financial models, sustainable business practices and sustainable business models.
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Financial models
We look to identify excess economic returns, focusing on companies with capital efficiency, cash generation and limited dependency on external capital.
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| 2 | Business practices The team also considers extra-financial information (Environmental, Social and Governance criteria) aimed at avoiding the worst corporate practices and controversies which can be damaging both to society and to investment returns. |
| 3 | Business model We believe that companies with business models that are well-positioned for long-term trends – such as the transformation taking place across Asia – will have staying power through economic cycles. |
The end result
The result is a high conviction portfolio of 30-50 stocks that seeks to invest in attractively priced companies set to benefit from Asia’s growth and evolution, with the potential to achieve above-market growth and navigate economic cycles.
Sustainability-accredited
The strategy was accredited by the ‘Towards Sustainability’ quality standard in November 2020 / February 2021, in recognition of our robust sustainability framework, analysis and stewardship approach.
Source: www.towardssustainability.be. The quality standard is developed on the initiative of Febelfin. Awards and ratings subject to change without notice. The Central Labelling Agency (CLA) assumes no responsibility and shall not be liable for the noncompliance with applicable rules and regulations regarding, among others but not limited to, the marketing of financial instruments by a product provider, a financial institution or any other market participant or party who uses the ‘Towards Sustainability’ label.
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