Beyond the headlines in Asia

For Marie-Anne Meldahl and Lovisa Styrud, portfolio managers of SEB Asienfond ex Japan, successful investing in Asia is not about following the latest market narrative. It is about maintaining a disciplined investment process while identifying opportunities in one of the world’s most dynamic and diverse regions.

Asian equity markets are often viewed through the lens of China, geopolitics or the latest developments in artificial intelligence. While these themes are important, Marie-Anne Meldahl and Lovisa Styrud believe they can overshadow the breadth of opportunities available across the region.

One common misconception is that Asian equities are largely synonymous with China. In reality, the region has evolved significantly over the past decade. Today, Taiwan represents close to 28% of the MSCI AC Asia ex Japan Index, South Korea around 21%, while China accounts for slightly less than 25%. Hong Kong adds another 5%. The rapid growth of semiconductor and AI-related companies has increased the importance of Taiwan and South Korea, while China's relative weight has declined.

“Asia offers exposure to many different growth drivers. It is much more than a single-country story,” they explain.

The same diversification is reflected in the fund. Taiwan and South Korea each account for roughly a quarter of the portfolio, while China represents just over 20%, complemented by investments across India and Southeast Asia.

A disciplined approach in complex markets

The fund is managed using a proprietary quantitative multi-factor strategy designed to identify attractive opportunities across a broad investment universe.

Rather than relying on a small number of concentrated positions, the strategy combines exposure to attractively valued companies, profitable businesses and companies benefiting from positive analyst revisions. The result is a diversified portfolio with exposure to a large number of companies across countries and sectors.

This approach is particularly relevant in Asia and emerging markets, where lower analyst coverage, varying market structures and regulatory differences can create both opportunities and risks. By maintaining broad diversification and focusing on risk management, the managers seek to reduce company-specific risks while capturing multiple sources of return.

“We believe a systematic framework helps us remain disciplined and consistent across different market environments,” they say.

Asia's role in the AI revolution

Technology has been one of the defining drivers of Asian equity markets in recent years. Companies such as TSMC, Samsung Electronics and SK Hynix play critical roles in the global semiconductor ecosystem and have been major beneficiaries of growing demand for AI infrastructure.

For investors, however, the opportunity extends beyond the largest semiconductor manufacturers. The managers see an expanding ecosystem of beneficiaries, including suppliers, infrastructure providers and companies expected to benefit from broader AI adoption.

Several of the fund's strongest contributors in recent years have come from this theme. Holdings such as Samsung Electronics, SK Hynix, Delta Electronics and Accton Technology have benefited from increasing investment in AI-related hardware and infrastructure. At the same time, opportunities have emerged in other sectors, including financial, industrial and consumer companies, with investments such as Pop Mart also contributing strongly to performance.

A long-term case for Asia

Marie-Anne and Lovisa remain focused on the long-term investment case for Asia.

They point to structural trends such as urbanization, rising incomes, digital adoption and technological innovation as long-term drivers of growth. Many Asian economies are also expected to grow faster than developed markets over the coming decade, supporting corporate earnings growth.

The managers also note that Asian equities continue to trade at lower valuations than many developed markets, while the region remains central to global technology supply chains.

“We believe Asia remains one of the most compelling regions for long-term investors. The combination of structural growth, technological leadership and attractive valuations creates a strong foundation for future opportunities.”

That long-term approach has also been recognized externally. SEB Asienfond ex Japan currently holds a Morningstar 5-star rating, based on its three-year risk-adjusted performance relative to peers.