Eastern Opportunities: Discovering Asia's hidden investment treasures
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Article Type
Insights
Topic
Opinion
Published
September 22, 2025
Read time
5 mins
Author
Robin Black
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Asian equities can offer investors a dynamic mix of opportunities. For those prepared to navigate the twists, turns and inevitable volatility, Asia’s exciting and diverse markets can unleash compelling rewards.

 

Investors often view Asian stock markets as dynamic and exciting, though also risky and volatile. The Asia Pacific region, in particular, is commonly associated with phrases such as ‘economic miracle’, ‘tiger economies’ and ‘currency crisis.’

 

As an investor who witnessed the aftershock of the Japanese economic miracle and the contagion of the 1997 Asian Financial Crisis, I am well aware of what a ride these markets can be. I was also based in Hong Kong when the China bull market was in full swing.

 

At first glance, these markets may not seem natural sources of income for a high-quality, steady strategy like the Aegon Global Equity Income Fund. However, underneath the boom-and-bust nature of Asian markets lie several wonderful companies, many of which we hold in our portfolio.

 

Tech treasures

Historically, Asian technology stocks were low-quality assembly operations, typically located in Taiwan. Such companies still exist, often paying high dividends. However, the low value-add nature of their core businesses does not appeal to us. We prefer global leaders with a strong market share.

 

TSMC is a case in point. As the world’s leading semiconductor manufacturer, it has an almost 70% share of the global foundry market, putting it well ahead of its closest rival, Samsung Electronics, which commands under 10%. We have held TSMC since the Fund’s launch in 2012 and the stock has been a multibagger over that period.

 

Another Taiwanese winner is Delta Electronics. Like its compatriot TSMC, Delta is a world leader operating in a structurally growing market. The company provides power management and liquid cooling products to data centres, putting it at the heart of the boom in artificial intelligence (AI) and driving a sharp rise in its share price over the past few years.

 

Across the Taiwan Strait, we own another technology company, Tencent. Almost every single Chinese person uses one or more Tencent products. It is a leading software business with operations in gaming, AI, digital payments, cloud computing and messaging platforms, providing a wide range of growth drivers.

 

Financial sector finds

Asia’s success stories extend beyond the tech sector. It is also home to several excellent financial companies like Australia’s Macquarie Group. The company is an expert at deploying capital between its diverse range of businesses, which include infrastructure, wealth management and investment banking activities. Its share price has outperformed most major global banks over the past decade, thanks to this proactive approach.

 

We also own DBS Group in Singapore, which is far less dynamic in changing its business mix, but every bit as attractive as an investment. DBS prefers to focus on the traditional banking model, and one could certainly make a case for it being Asia’s best bank in this category. As a result of this focus, it is highly profitable, as its 17% return on equity suggests. In fact, it has so much excess capital at the moment that it is paying a quarterly ‘capital return’ dividend. This is in addition to its ordinary dividend, which in itself has almost doubled since 2022. Taken together, these distributions give an annual dividend yield of close to 6%, making DBS one of Asia’s great dividend growth (and capital appreciation) stories of recent years.

 

A rare telecom trophy

Dynamic and exciting are perhaps not terms you naturally think of when it comes to telecommunication companies, as they are usually blighted by low growth and high debt.

 

Thankfully, in Singapore Telecommunications (SingTel), we have found a company offering growth, perhaps not in the core market, but in data centres and emerging markets such as India. Its balance sheet is robust, allowing it to return a 4.5% dividend to investors.

 

The allure of Asia

Within the Aegon Global Equity Income Fund, we have been overweight Asian markets for some time, finding them an excellent source of alpha (outperformance), beta (market exposure and risk), and income (steady cash flow) – quite the trio.

 

Of course, Asia is not a homogeneous region, which brings numerous governance, macroeconomic and geopolitical considerations. However, with the correct risk framework and rigorous analysis, investing in Asia can unlock significant rewards.  

Disclosures

Author

Robin Black
Investment Manager

Robin Black, investment manager, is a member of the global equities team, with emphasis on the Asian and US markets. 

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