Asia Pacific Leaders

Asia Pacific Leaders

The Asia Pacific Leaders strategy invests in large and mid-sized companies which generally have a total stock market value of at least US$1 billion. 

The Asia Pacific Leaders strategy was originally launched in December 2003 and invests in large and mid-sized companies which generally have a total stock market value of at least US$1 billion (hence ‘Leaders’).

This equity-only strategy seeks to invest in between 30 to 60 high-quality businesses in the Asia Pacific region (including Australia and New Zealand, but excluding Japan) that are helping bring about a more sustainable future.

Strategy highlights: a focus on quality and sustainability

  • Companies must contribute to sustainable development. Portfolio Explorer >

  • We invest in high-quality companies with exceptional cultures, strong franchises and resilient financials. How we pick companies >

  • We avoid companies linked to harmful activities and engage and vote for positive change. Our position on harmful products >

  • Our approach is long-term, bottom-up, high conviction and benchmark agnostic

  • We focus on capital preservation as well as capital growth – we define risk as the permanent loss of client capital

Strategy name change

Please note, from 21 November 2024 Stewart Investors Asia Pacific Leaders Sustainability name will be updated to Asia Pacific Leaders. By 30 September 2025, the Stewart Investors NZ PIE Fund name will be updated to reflect these Strategy name changes. Please refer to this note for further information. 

Latest insights

Quarterly updates

Strategy update: Q3 2024

Asia Pacific Leaders strategy update: 1 July - 30 September 2024

Over most three-month periods, there should be relatively little change in the portfolio. We aim to build resilient portfolios of high-quality companies with diversified streams of cash flows that have the ability to grow in value over the long term.

During the last few days of the quarter the Chinese central bank and government announced monetary and fiscal stimulus measures for the economy, causing Chinese stocks to rally significantly. Whilst it is heartening to see the Chinese authorities attempting to address the problems within the economy it remains unclear whether this stimulus will adequately address broader structural issues like the lack of consumer demand.

The portfolio initiated a position in ICICI Lombard (India: Financials), a conservatively run insurer set to potentially benefit from rising insurance penetration in India. We also purchased a new position in Ayala (Philippines: Industrials), a 190-year-old Filipino conglomerate stewarded by the Ayala family who in recent years have appointed the first ever non-family CEO.

During the quarter we continued to add to Techtronic Industries (Hong Kong: Industrials) and increased our position in Kasikornbank (Thailand: Financials) and Dabur (India: Consumer Staples).

We trimmed our position size in Midea (China: Consumer Discretionary). Whilst we continue to be impressed by Midea’s management team, the efficiency of their production base and their capital allocation, we are wary of the risk US and European tariffs may pose to the 40% of the business which exports goods.1 We also trimmed HDFC Bank (India: Financials), Kotak Mahindra Bank (India: Financials), and Fisher & Paykel Healthcare (New Zealand: Health Care) to fund better ideas elsewhere.

We sold Vitasoy (Hong Kong: Consumer Staples) for liquidity reasons and to fund better ideas elsewhere.

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Views on investment opportunities in Asia have not changed; the strategy continues to look to invest in high-quality companies that are aligned with sustainable development. We look for stewards who are low profile, competent, long-term decision makers, franchises free from political agendas and financials that are resilient, not frail. Our focus is on quality, and we remain indifferent to many of the large, well-known companies, regardless of lower valuations.

1 Source: S&P Capital IQ. Calendar year 2023

Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.

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Stewart Investors Quarterly Client Update Q3 2024

1 July - 30 September 2024

Quarter update

Risk factors

This material is a financial promotion for the Stewart Investors strategies – Asia Pacific and Japan All Cap, Asia Pacific Leaders, Asia Pacific All Cap, European All Cap, European (ex UK) All Cap, Global Emerging Markets All Cap, Global Emerging Markets Leaders, Indian Subcontinent All Cap, Worldwide All Cap and Worldwide Leaders – and is intended for professional clients only in the UK, Switzerland and EEA and professional clients elsewhere where lawful.

Within the EU/EEA and Switzerland, the European (ex UK) strategy is only available to investors via a segregated mandate account.

Investing involves certain risks including:

  • The value of investments and any income from them may go down as well as up and are not guaranteed. Investors may get back significantly less than the original amount invested.
  • Emerging market risk: Emerging markets tend to be more sensitive to economic and political conditions than developed markets. Other factors include greater liquidity risk, restrictions on investment or transfer of assets, failed/delayed settlement and difficulties valuing securities.
  • Indian Subcontinent risk: although India has seen rapid economic and structural development, investing there may still involve increased risks of political and governmental intervention, potentially limitations on the allocation of the strategy’s capital, and legal, regulatory, economic and other risks including greater liquidity risk, restrictions on investment or transfer of assets, failed/delayed settlement and difficulties valuing securities.
  • Specific region risk: investing in a specific region  may be riskier than investing in a number of different countries or regions. Investing in a larger number of countries or regions helps spread risk.
  • Currency risk: the strategies invest in assets which are denominated in other currencies; changes in exchange rates will affect the value of the strategies and could create losses. Currency control decisions made by governments could affect the value of the strategies’ investments and could cause the strategies to defer or suspend redemptions of shares.
  • Concentration risk: the European Sustainability and Worldwide Leaders Sustainability strategies referred to in this material invest in a relatively small number of companies which may be riskier than a strategy that invests in a large number of companies.
  • Smaller companies risk: investments in smaller companies may be riskier and more difficult to buy and sell than investments in larger companies.

Where featured, specific securities or companies are intended as an illustration of investment strategy only, and should not be construed as investment advice or a recommendation to buy or sell any security.

If you are in any doubt as to the suitability of our strategies for your investment needs, please seek investment advice.

Investment philosophy

  • We are stewards: Our role is to allocate society’s capital to productive uses, in accordance with our Hippocratic Oath
  • We are long term: Our time horizon is measured in years, not weeks, and we value companies accordingly
  • We invest only in companies contributing to a more sustainable future: We engage constructively as owners to help companies on their sustainability journeys
  • We invest only in high-quality companies: We seek out companies with exceptional cultures, strong franchises and resilient financials
  • We believe capital preservation is important for capital growth: We define risk as the possibility of the permanent loss of client capital

Investment objective

To generate attractive long-term, risk-adjusted returns by investing in the shares of high-quality companies that are particularly well positioned to contribute to, and benefit from sustainable development.

Important information

This material is for general information purposes only. It does not constitute investment or financial advice and does not take into account any specific investment objectives, financial situation or needs. This is not an offer to provide asset management services, is not a recommendation or an offer or solicitation to buy, hold or sell any security or to execute any agreement for portfolio management or investment advisory services and this material has not been prepared in connection with any such offer. Before making any investment decision you should conduct your own due diligence and consider your individual investment needs, objectives and financial situation and read the relevant offering documents for details including the risk factors disclosure. Any person who acts upon, or changes their investment position in reliance on, the information contained in these materials does so entirely at their own risk.

We have taken reasonable care to ensure that this material is accurate, current, and complete and fit for its intended purpose and audience as at the date of publication but the information contained in the material may be subject to change thereafter without notice.

No assurance is given or liability accepted regarding the accuracy, validity or completeness of this material.

To the extent this material contains any expression of opinion or forward-looking statements, such opinions and statements are based on assumptions, matters and sources believed to be true and reliable at the time of publication only. This material reflects the views of the individual writers only. Those views may change, may not prove to be valid and may not reflect the views of everyone at First Sentier Investors.

Past performance is not indicative of future performance. All investment involves risks and the value of investments and the income from them may go down as well as up and you may not get back your original investment. Actual outcomes or results may differ materially from those discussed. Readers must not place undue reliance on forward-looking statements as there is no certainty that conditions current at the time of publication will continue. 

References to specific securities (if any) are included for the purpose of illustration only and should not be construed as a recommendation to buy or sell the same. Any securities referenced may or may not form part of the holdings of First Sentier Investors’ portfolios at a certain point in time, and the holdings may change over time.

References to comparative benchmarks or indices (if any) are for illustrative and comparison purposes only, may not be available for direct investment, are unmanaged, assume reinvestment of income, and have limitations when used for comparison or other purposes because they may have volatility, credit, or other material characteristics (such as number and types of securities) that are different from the funds managed by First Sentier Investors.

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About First Sentier Investors

References to ‘we’, ‘us’ or ‘our’ are references to First Sentier Investors, a global asset management business which 

is ultimately owned by Mitsubishi UFJ Financial Group (MUFG). Certain of our investment teams operate under the trading names FSSA Investment Managers, Stewart Investors and Realindex Investments, all of which are part of the First Sentier Investors Group.

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Strategy update: Q2 2024

Asia Pacific Leaders strategy update: 1 April - 30 June 2024

Over most three-month periods, there should be relatively little change in the portfolio. We aim to build resilient portfolios of high-quality companies with diversified streams of cash flows that have the ability to grow in value over the long term.

During the quarter, extremely short-term volatility spiked in the immediate days before and after the election in India. Sober reflection on the increased accountability of the Bharatiya Janata Party (BJP) and the victory for democracy meant Indian equities quickly resumed a more positive direction. At Stewart Investors we studiously avoid companies that are influenced or impacted by politics.

There were no new investments added to the portfolio this quarter. However, we took advantage of lower valuations in China to add to Shenzhen Inovance (China: Industrials) and Techtronic Industries (Hong Kong: Industrials). We also continued to build the position size in Samsung Electronics (South Korea: Information Technology) and Samsung Biologics (South Korea: Health Care).

We also controlled the size of largest position Mahindra & Mahindra (India: Consumer Discretionary) as well as Tech Mahindra (India: Information Technology), Kotak Mahindra Bank (India: Financials) and HDFC Bank (India: Financials). We reduced OCBC Bank (Singapore: Financials) as we believe we have better ideas elsewhere.

In terms of complete divestments, we sold WuXi Biologics (China: Health Care) after a proposed bill in the United States Congress aimed to restrict some Chinese biotech business tie-ups with United States companies due to national security concerns. It was a mistake to invest in WuXi Biologics given the geopolitical risk to which it is exposed. We sold Kingmed Diagnostics (China: Health Care) due to the company’s regulatory exposure. Despite the value provided to customers, it is difficult for us to assess the risk of forced pricing cuts for these Chinese companies amidst reductions to government healthcare spending and we have therefore exited our position. We reappraised franchise development and quality at Pigeon (Japan: Consumer Staples), Infineon Technologies (Germany: Information Technology) and Telkom Indonesia (Indonesia: Communication Services). This resulted in complete divestments from these positions. 

Views on investment opportunities in Asia have not changed; the strategy continues to look to invest in high-quality companies that are aligned with sustainable development. We look for stewards who are low profile, competent, long-term decision makers, franchises free from political agendas and financials that are resilient, not frail. Our focus is on quality, and we remain indifferent to many of the large, well-known companies, regardless of lower valuations.

Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.

Strategy update: Q1 2024

Asia Pacific Leaders strategy update: 1 January - 31 March 2024

Over most three-month periods, there should be relatively little change in the portfolio. We aim to build resilient portfolios of high-quality companies with diversified streams of cash flows that have the ability to grow in value over the long term.

During the quarter we initiated three new positions in Samsung C&T (South Korea: Industrials), Techtronic Industries (Hong Kong: Industrials) and MediaTek (Taiwan: Information Technology).

Samsung C&T is the holding company for Samsung Biologics with sizeable positions in group companies such as Samsung Electronics (c.5%).

Samsung Biologics is a world leader in affordable healthcare. Samsung Electronics is a global leader in consumer electronics and chip manufacturing.

In its core business, the company is aiming to invest into areas with strong demand tailwinds such as renewable energy and battery recycling. The group aims to improve governance practices by returning excess cash to shareholders, cancelling treasury shares, improving profitability in core assets and articulating a clear strategy for future capital allocation.

Techtronic Industries is dominant internationally in an array of cordless, hand, measuring and trade power tools for both home and commercial use. They have ownership of strong brands in consolidated areas which results in pricing power. The company is positioned well to grow organically and by acquisition.

MediaTek is a fabless (outsourced production) semiconductor company. They are leaders in integrated chip system solutions which are estimated to power over two billion devices a year from smartphones to home entertainment, connectivity and the internet of things (IoT) products.

We exited Altium (Australia: Information Technology) and HDFC Life (India: Financials). We sold Altium after it was approached by Japanese listed Renesas Electronics for acquisition at 37% premium to the prevailing market price. HDFC Life was sold to fund better ideas elsewhere. We reduced Pigeon (Japan: Consumer Staples) as we have lost conviction in the speed and extent of the evolution of the franchise.

We took advantage of lower valuations in China and continue to build positions in Midea (China: Consumer Discretionary), Shenzhen Inovance Tech (China: Industrials), Glodon (China: Information Technology) and WuXi Biologics (China: Health Care). We also topped up the holding in Samsung Electronics (South Korea: Information Technology).

To finance new investments and our latest additions, and to control position size we trimmed holdings in Tata Consumer Products (India: Consumer Staples), Mahindra & Mahindra (India: Consumer Discretionary), Godrej Consumer Products (India: Consumer Staples), Tech Mahindra (India: Information Technology) and Bank Central Asia (Indonesia: Financials).

Views on investment opportunities in Asia have not changed; the strategy continues to look to invest in high-quality companies that are aligned with sustainable development. We look for stewards who are low profile, competent, long-term decision makers, franchises free from political agendas and financials that are resilient, not frail. Our focus is on quality, and we remain indifferent to many of the large, well-known companies, regardless of lower valuations.

Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.

Strategy update: Q4 2023

Asia Pacific Leaders strategy update: 1 October - 31 December 2023

Over most three-month periods, there should be relatively little change in the portfolio. We aim to build resilient portfolios of high-quality companies with diversified streams of cash flows that have the ability to grow in value over the long term.

High-quality companies at reasonable valuations tend not to come along too often. In the absence of such opportunities, we are very comfortable long-term owners of companies in the portfolio.

During the quarter we initiated two new positions in Samsung Biologics (South Korea: Health Care) and Wuxi Biologics (China: Health Care). We have admired the Samsung Biologics franchise for many years. They have expanded production capacity quickly and efficiently which has helped them to increase wallet share with existing clients and win important new clients. Our more constructive stance on governance at the Samsung Group was another important consideration. We have also been studying Wuxi Biologics for a number of years. It is a leading contract research provider and manufacturer for pharmaceutical companies. The stewards have spent the last decade nurturing strong relationships with customers across geographies, and are building on their research relationships to scale up manufacturing services. The nature of the business, where the timeline from drug discovery to manufacturing can be decades, means that long-term customer relationships are crucial, and the trust built is difficult to disrupt. In terms of additions, we continued to build our holding in Midea (China: Consumer Discretionary), the largest home appliances business in China.

There were no complete divestments during the period. We trimmed Tata Consumer Products (India: Consumer Staples) and Tech Mahindra (India: Information Technology) to control position size. We also reduced the holding in CSL (Australia: Health Care). We are still long-term supporters of this extremely high-quality franchise but consider there to be marginally better risk-reward opportunities elsewhere.

Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.

Proxy voting

Proxy voting: Q3 2024

Asia Pacific Leaders proxy voting: 1 July - 30 September 2024

Proxy voting by country of origin

Proxy voting by proposal category

During the quarter there were 126 resolutions from 16 companies to vote on. On behalf of clients, we voted against one resolution. 

We voted against the appointment of the auditor at Vitasoy as they have been in place for over ten years. The company has given no information on intended rotation which we believe is important for ensuring a fresh perspective on the accounts. (one resolution)

Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.

Proxy voting: Q2 2024

Asia Pacific Leaders proxy voting: 1 April - 30 June 2024

Proxy voting by country of origin

Proxy voting by proposal category

During the quarter there were 225 resolutions from 23 companies to vote on. On behalf of clients, we voted against six resolutions.

We voted against the appointment of the auditor at Glodon and Yifeng Pharmacy Chain as they have been in place for over 10 years and the companies’ have given no information on intended rotation. We believe rotating an auditor on a relatively frequent basis (e.g. every 5-10 years) helps to ensure a fresh pair of eyes are examining the accounts, and follows best practice. (two resolutions)

We voted against a proposal regarding transaction of business at Kasikornbank as the company provided insufficient detail on the proposal and we wish to avoid unfettered discretion. (one resolution)

We voted against the proposed employee stock ownership plan at Midea as we believe non-executive director involvement could lead to a conflict of interest and would not be in shareholders' interest. (three resolutions)

Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.

Proxy voting: Q1 2024

Asia Pacific Leaders proxy voting: 1 January - 31 March 2024

Proxy voting by country of origin

Proxy voting by proposal category

During the quarter there were 105 resolutions from 17 companies to vote on. On behalf of clients, we voted against 3 resolutions. 

We voted against excessive executive remuneration at Bank Central Asia. (one resolution)

We voted against an adjustment of the Guarantee for Controlled Subsidiaries Assets Pool Business at Midea as we found the guarantee amount to be excessive and not in shareholders' best interests. (one resolution)

We voted against a Board appointment at Samsung Electronics as we would prefer to see more independent, non-family associated Directors. (one resolution)

Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.

Proxy voting: Q4 2023

Asia Pacific Leaders proxy voting: 1 October - 31 December 2023

Proxy voting by country of origin

Proxy voting by proposal category

During the quarter there were 78 resolutions from 11 companies to vote on. On behalf of clients, we voted against 24 resolutions. 

We voted against the Board re-election at ResMed as we were not able to vote against individual directors and opted to vote against Mr P Farrell who retired from the company 10 years ago and we believe he should step down from the board. We voted against the company’s executive remuneration, as we believe it to be complex and measured on many adjusted metrics. We also voted against the re-appointment of the auditor as they have been in place for 29 consecutive years. (24 resolutions - the resolutions for this company are duplicated as one vote instruction is for the company’s global meeting and the other is for the company’s domestic meeting) 

We abstained from voting on the approval of a renewed liability insurance for Directors, Supervisors, and Senior Management at Midea Group as we did not have sufficient information on the details of the insurance policy at the time of voting. (one resolution)  

Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.

Portfolio Explorer

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For illustrative purposes only. Reference to the names of example company names mentioned in this communication is merely for explaining the investment strategy and should not be construed as investment advice or investment recommendation of those companies. Companies mentioned herein may or may not form part of the holdings of Stewart Investors. Holdings are subject to change.

Certain statements, estimates, and projections in this document may be forward-looking statements. These forward-looking statements are based upon Stewart Investors’ current assumptions and beliefs, in light of currently available information, but involve known and unknown risks and uncertainties. Actual actions or results may differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements. There is no certainty that current conditions will last, and Stewart Investors undertakes no obligation to correct, revise or update information herein, whether as a result of new information, future events or otherwise.

Source: Stewart Investors investment team and company data. Securities mentioned are all investee companies* from representative Asia Pacific All Cap Strategy, Asia Pacific & Japan All Cap Strategy, Asia Pacific Leaders Strategy, European All Cap Strategy, European (ex UK) All Cap Strategy, Global Emerging Markets (ex China) Leaders Strategy, Global Emerging Markets Leaders Strategy, Global Emerging Markets All Cap Strategy, Indian Subcontinent All Cap Strategy, Worldwide All Cap Strategy and Worldwide Leaders Strategy accounts as at 30 September 2024. *Assets that the strategies may hold which an active decision has not been made, and sustainability assessment does not apply, include cash, cash equivalents, short-term holdings for the purpose of efficient portfolio management and holdings received as a result of mandatory corporate actions. Holdings of such assets will not appear on Portfolio Explorer.

The Stewart Investors supports the Sustainable Development Goals (SDGs). The full list of SDGs can be found on the United Nations website.

Source for Climate Solutions and impact figures: © 2014–2024 Project Drawdown (drawdown.org). Source for Human Development Pillars: Stewart Investors investment team.

Source for climate solutions and human development analysis and mapping: Stewart Investors investment team. Contributions are defined by the team as demonstrable contributions to any solution, either direct (directly attributable to products, services or practices provided by that company), or enabling (supported or made possible by products or technologies provided by that company).

Investment terms

View our list of investment terms to help you understand the terminology within this document.