Equities Why China over India?
William Lam, Co-Head Asian & EM Equities shares insights from the team on why they believe there is a contrarian opportunity in being overweight China and underweight India.
May 8, 2024
Capture valuation discount opportunities with Invesco's Asian equity approach
An active approach of around 60 companies across Asia Pacific ex Japan derived from bottom-up analysis with a tight focus on valuation and a contrarian mindset.
Capturing opportunities in Asia
Asia remains the fastest-growing region in the world. By 2050, it could account for half of global economic output¹ and be home to the world’s largest middle class. This represents a large opportunity set for active investors like us.
Leaning into risk
Valuation anomalies naturally emerge in areas of excessive pessimism. That’s why we often look for new ideas in unloved areas of the market.
We do the fundamental work and speak with company management to gauge where consensus is wrong. This gives us the confidence to help investors lean into this perceived risk and buy mispriced assets. The other side of the same coin is to avoid expensive assets during periods of euphoria.
Why the Invesco Asian equity approach?
We ride the wave from contrarian to popular
We don’t chase the market to find new opportunities. As active investors with a contrarian approach, we buy and build positions in temporarily unloved stocks trading well below our estimate of fair value.
We believe that valuation is paramount
We believe that the most sustainable way to make money for clients is to buy companies for less than they are worth. Our valuation-led approach incorporates rigorous fundamental analysis, meaning we can identify the likely sources of mispricing and how our views differ from consensus.
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We capture opportunities by focussing on the long term
We believe that share prices reflect fundamentals over time. Markets tend to overact to current events and underappreciate a company’s long-term prospects. By taking a long-term approach to investing, we’re able to capitalize on the market’s short-termism.
William Lam, fund managerVolatility provides opportunity, uncertainty leads to mispricing.
The team has been successfully investing in Asian and emerging market equities for over 20 years. Today, the team’s Asian equity strategies have a combined AuM of > EUR 9 billion.
Invest in the fastest-growing region in the world
Take advantage of a large opportunity set
Benefit from active, valuation-led investing
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Footnotes
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1 Source: Asian Development Bank