As we mark 30 years since the inception of Schroder Asia Pacific, it is striking just how profoundly Asia – and our approach to investing within it – has evolved.
When the Trust was launched in 1995, the region was primarily viewed as a manufacturing powerhouse, producing electronics, telecom equipment, and textiles.
By the time I became portfolio manager in 2021, this landscape had already shifted remarkably, driven by technological change, entrepreneurial ambition and the opening of new growth avenues.
From manufacturing to technology hubs
In the mid-1990s, much of Asia’s development was tethered to manufacturing and exports. Now, as digitalisation accelerates across the region, we see Asian entrepreneurs harnessing new technologies, moving well beyond traditional sectors.
This shift is more than economic – it’s transformational in outlook. Today, Asia has some of the world’s leading technology companies and is central to the burgeoning global demand for artificial intelligence (AI), cloud computing and digitisation.
The trust has a significant weighting in Asian technology companies, with its largest holding – Taiwan Semiconductor Manufacturing Company (TSMC) – providing investors with exposure to the crucial supply chains underpinning the most powerful tech trends.
Beyond the well-known tech and AI giants, the region also offers genuine opportunities for diversification across a broad spectrum of innovative companies.
This opens the door to identifying the next generation of technology leaders in Asia. E-ink, for instance, has developed a niche in ‘paper’ screens used in e-readers, highlighting the diverse potential within Asia as an investment region.
Learning from change and managing risk
One critical lesson from 30 years in Asian markets is the need to continually adapt – both to new opportunities and to potential risks. Regularly reassessing our exposures and remaining alert to emerging trends have proved essential disciplines.
Alongside the region’s shift towards technology, the rapid expansion of the middle class has been a defining change. This demographic transformation has broadened the range of investment opportunities and enabled greater diversification.
Furthermore, strengthened corporate governance and an enhanced focus on shareholder interests have come to the fore, making many Asian markets more attractive than in previous decades.
When navigating these emerging opportunities, we have found significant value in having a strong local presence. Direct engagement with companies and on-the-ground insights have played a decisive role in our ability to distinguish substance from noise over the past 30 years in what is a constantly evolving investment landscape.
Evolving geographical allocation
Our approach to geographic allocation continues to evolve as the region changes. Seeking out high quality companies trading at attractive long-term valuation has remained at the centre of our investment philosophy.
Currently, this means greater emphasis on markets such as Hong Kong, Singapore, Taiwan and the Philippines. We have also increased our exposure to Vietnam, recognising its expanding role in global supply chains and rapid economic development.
Why Asia still matters
Asia is set to generate around 60% of global economic growth in 2026, offering investors exposure to dynamic and resilient companies adapting to global competition and economic cycles.
What was once a narrow market opportunity has become vast and diverse, further strengthening the case for a bottom-up, stock-picking approach.
Many of the positive aspects of the investment case for Asia are domestic-oriented, with a number of Asian economies continuing to benefit from favourable demographics, rising income levels and deepening financial markets.
As wealth increases, so too does the demand for goods and services that are already widely established in developed markets – from financial products and healthcare, to travel, technology and branded consumer goods.
Looking ahead
The pace of change in Asia is both exhilarating and unpredictable. With Asian firms increasingly important in leading global innovation and such diversity across the region, there is no single formula for success. Long-term returns increasingly depend on rigorous research and a focus on fundamentals.
While many Asian economies remain export-oriented, they now benefit from robust domestic growth drivers, deeper capital markets, and stronger institutions. This has made the region more resilient and better positioned to withstand the uncertainties of global trade than ever before.
Three decades on, our approach continues to evolve, informed by both experience and rapid developments in the region. The key lesson is clear: flexibility, careful analysis, and a grounded outlook are essential for navigating Asia’s shifting landscape.
Abbas Barkhordar is portfolio manager of the Schroder Asia Pacific trust. The views expressed above should not be taken as investment advice.