Translating Asia's growth

Asia Long-Term Unconstrained

30 May 2019

ALTU story

Many investors have been attracted to Asia’s high levels of growth, only to find it difficult to translate into returns. Andrew Graham, Head of Asia, explores the different approach behind our Asia Long-Term Unconstrained (ALTU) strategy and why he believes it is an effective way of accessing the region’s long-term return potential.

“With new industries and capabilities continuing to emerge, Asia’s impressive growth story continues and it remains an attractive prospect for investors. It is not without it challenges, however, these can be mitigated by investing at reasonable valuations in a diversified portfolio of higher-return businesses, that are cash generative and have opportunities for continued growth, backed up by sound finances and a management team with a history of sensible capital deployment.

“This was the focus of our ALTU strategy when it was launched over 10 years ago and it remains our focus today. Effective execution of this approach has enabled us to meet our return aspirations and deliver attractive risk-adjusted returns for our clients.”

1. The concept

Asia's role as an economic powerhouse is well established, so why does the stock market have such a chequered track record when it comes to delivering investment returns that reflect this growth?

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2. Validating the concept

Making the leap from theoretical proof of concept, to actual investment outcomes. What does this look like?

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3. Capturing Future Growth

Over the first decade of its life, ALTU has demonstrated its effectiveness but what is the scope for the region – and the strategy – to thrive in the future?

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ALTU story PDF

Executive summary

  • Asian markets can deliver spectacular returns in the short term but have often failed to reflect the region’s high economic growth in the longer term.
  • Since inception over 10 years ago, ALTU has delivered returns commensurate with Asian nominal GDP growth, by investing in businesses that are able to grow with the region and translate this growth into shareholder returns.*
  • Our focus is high-return businesses, but there are also underlying secular dynamics which we believe underpin the Asia growth opportunity, notably: consumption, trade, innovation and infrastructure.

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Past performance is not a guide to future returns.
* Source: Martin Currie and IMF World Economic Outlook to 30 April 2019.