A fund that looks beyond Asia's immediate future

In addition to maintaining robust growth, effective managers must prioritize governance

Finding active opportunities in Asian markets can be done in the following ways.

Even when the effects of tariffs are taken into account, emerging marketsand particularly Asian economiesare still predicted to grow significantly faster than developed economies over the coming years.

The best example is India. The IMF projects that its GDP will grow by 6:02 percent in 2025 and 6:03 percent in 2026, while advanced economies are only expected to grow by 1:4 and 1:5 percent, respectively. China's growth rate is expected to be 4% over the next two years.

In these markets, however, it takes an advantage to find opportunities. An active approach is required because the majority of Asian markets are still inefficient.

An active edge.

Established in 1985, the 460 million Pacific Assets Trust (LSE: PAC) has made investments throughout the Asia Pacific region, with the exception of Japan, Australia, and New Zealand. Building on a proven track record, Stewart Investors assumed control of the portfolio in 2010. The trust's net asset value (NAV) return during that period has been 270 percent, while the MSCI AC Asia ex Japan index has returned 150 percent and the peer group average has returned 243 percent.

One of the trust's co-managers, Doug Ledingham, who has worked for Stewart Investors since the late 1980s, advises investors to exercise caution when allocating their funds in Asia. "If the index is examined. By giving your money to entrepreneurs and families who might not have your best interests at heart, you could be giving it to state-owned businesses that are poorly run.

This is especially true for China, which makes up about one-third of the benchmark for trusts. "The vast majority of companies in China are state-owned," he asserts. Because of this, the state typically decides investments based on their profitability rather than their viability.

Favoring India.

At just under 35%, India is the largest country-specific allocation, while China accounts for about 17% of Pacific Assets Trust's portfolio. As a "function of the depth of opportunities that we find in India," Ledingham claims that this has been the situation ever since Stewart assumed leadership. It's the best place to find wonderful families and businesses.

In a crowded market, the trust stands out thanks to that latter point. Ledingham claims that sticking with generational, family-owned businesses is the only way the trust can be certain that its businesses are long-term focused. Two-thirds of the portfolio has been held for at least five years, and the top ten positions have been held for an average of nine years.

At 5% of the portfolio, Mahindra & Mahindra, one of the biggest automakers in India, is the largest holding. You can observe how the trust sets itself apart by contrasting that with the index, which has semiconductor manufacturer TSMC as its largest holding with a weight of almost 10%.

With a professional CEO and long-term family ownership, Mahindra & Mahindra offers a "wonderful combination." "A combination that is incredibly potent," Ledingham states. The stock has returned 760 percent over the last five years, while TSMC has returned 213. The stock has yielded a 1,200 percent return since 2010.

No rash adjustments.

Ledingham claims that the managers are not making any rash adjustments to the portfolio while they keep an eye on the effects of tariffs. "During times of market turbulence, we make an effort to avoid making too many changes to the portfolio and instead concentrate on spending time with our companies, talking to the people who run them, and reiterating their thoughts.

When there is instability, it is even more crucial to invest with "trustworthy families and entrepreneurs that have their own money invested alongside yours" who are able to see beyond recent fluctuations. Some of Asia's most impressive growth stories are available to investors at a discount, as the trust is trading at a discount to NAV of just under 12 percent.