FSSA Asia Focus: December 2025 fund update

• FSSA has established a strong pedigree of investing across Asia

• We like the culture at FSSA – the managers view themselves as stewards of investors’ capital and look after it as if it were their own

• Martin Lau is a highly experienced investor who has built a strong track record

• This fund features on our Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

The FSSA Asia Focus fund seeks to grow your investment over the long term by investing in high-quality companies across the Asia Pacific region. This includes developed economies such as Hong Kong and Singapore as well as higher risk emerging markets like India, China and Indonesia.

The team uses a conservative investment approach where we typically expect the fund to provide more stable returns compared to some of their peers. This means the fund could complement more adventurous Asian funds or provide exposure to the Asian market as part of a globally diversified investment portfolio.

Manager

Martin Lau joined FSSA in 2002 and has managed this fund since it launched in 2015. He’s a highly regarded fund manager in Asia and has built up a long track record, with over 20 years of fund management experience. During that time, he’s managed multiple funds that invest across Asia, as well as funds focussed on China, an area in which he has particular specialism.

Lau is a humble fund manager and is open about all elements of fund management, including those areas where things haven’t worked as well. This is a quality we like as it shows continued development as an investor.

Rizi Mohanty became the fund’s co-manager at the start of 2024. He replaced Richard Jones, who retired in early 2025 following a long and successful investment career. Mohanty joined FSSA in 2016 and has over a decade of experience of investing in Asian markets.

Both Lau and Mohanty manage other FSSA funds but given the overlap in both approach and investable universe, we feel they can comfortably handle these responsibilities.

The managers are supported by a diverse team of investors, all of whom follow the same investment philosophy. They all contribute ideas and provide challenge to the fund managers before an investment is made.

Process

Asia is a hub of innovation and home to some of the most exciting companies in the world. From technology and automation to banks and consumer brands, the FSSA team believe there’s a wealth of opportunities for investors.

FSSA’s investment philosophy centres around quality. Lau and his team believe a company’s management team is one of the most important elements of quality. They search for companies run by reputable management teams that manage risks well to help grow their businesses over the long term.

The team also look for companies that have potential to grow their earnings over the long run. This includes those that have a strong brand that competitors can’t replicate, allowing the company to raise prices without a loss in consumer demand.

The managers are high-conviction investors, which means the fund can look quite different to the broader Asian stock market (the benchmark). Currently the fund invests more in China than any other country. This makes up 35% of the fund and is more than the benchmark. There are also significant investments in India and Taiwan, with each making up 17% of the fund.

On a sector level, a quarter of the fund invests in each of financials and technology. The amount in financials is slightly more than the benchmark and includes several Indian banks. This is an area where the managers see plenty of growth potential.

When making any investment, the managers take a long-term view. Therefore, they don’t tend to make too many changes from year to year. They often sell shares in companies that have performed well and could have less room to grow in future, while buying more shares in companies that have been weaker, but still have growth potential.

Over the past year, the managers added investments in H World Group and Trip.com. Both companies operate within China’s travel sector and the managers believe demand for their services will increase. Korean semiconductor company SK Hynix was also added to the fund.

Some investments were sold too. These included Taiwanese computer manufacturer Advantech and Chinese pharmaceutical company CSPC.

Culture

We like the culture and philosophy at FSSA, which forms part of the broader First Sentier Investments group. The team is made up of investors dedicated to looking after clients' money as if it's their own.

FSSA places emphasis on recruiting and maintaining great people. Every team member is an advocate of the overriding philosophy and they're encouraged to bring their own ideas to the table.

Lau is a Managing Partner of FSSA, so we think he's incentivised to ensure the business, including its funds and people, are successful. He looks after its team of analysts and fund managers, which means he can pass on his knowledge and experience. While he has additional responsibilities, we're confident he spends most of his time focused on investing.

Starting in 2025, fund managers have the option to own a share of the FSSA business. We’re pleased that many of the team, including Lau, took up this opportunity to commit to the business for the long term.

In November 2025 FSSA took over the management of funds previously managed by sister company Stewart Investors. Lau and Mohanty have taken responsibility for some Asia funds, which invest in similar companies to this fund. They will spend the next few months transitioning the Stewart Investors funds to more closely mirror their own, which increases their workload in the short term. We’ll be monitoring the progress of these changes as well as any impact managing the additional funds has on their responsibilities.

ESG integration

For the team at FSSA, Environmental, Social & Governance (ESG) considerations are much more than a label or box to be ticked. Taking these factors into account is a natural extension of the same investment process they’ve used for decades. The team’s philosophy is founded on stewardship – when they make an investment, they see themselves as part-owners of the business and want to make sure it’s run in a way that’ll benefit all shareholders.

ESG issues form a core part of this. For example, they don’t like companies that make reckless decisions in the pursuit of short-term gains, rather than focusing on longer term growth. A business shouldn’t exploit its workforce, take advantage of tax loopholes, or skirt around industry legislation. Importantly, it should cause little, if any, harm to the environment around it. The organisation has made a firm-wide commitment not to invest in companies whose primary business is to make tobacco products or controversial weapons.

The team also engages closely with company management. It helps them make sure management remain on track with sustainability issues and means they can encourage a change in behaviour if required. If they think a business doesn’t meet their standards, or isn’t doing enough to address a problem, they won’t invest. They produce an annual Responsible Investment report, and a Stewardship report. These reports outline the firm’s voting record, provide engagement updates and case studies, and present further ESG-focused research.

Cost

This fund has an ongoing annual charge of 0.90%, but we’ve secured a discount for HL clients of 0.15%. This means investors will pay a net ongoing charge of 0.75%.

The fund discount is achieved through a loyalty bonus, which could be subject to tax if held outside of an ISA or SIPP. The HL platform fee of up to 0.45% per year will also apply, except in the Junior ISA where no platform fee applies.

Performance

Martin Lau has a long track record investing in Asia. This fund has returned 162.92%* since launching in August 2015. This is slightly behind the fund’s benchmark, which rose 170.12%, but ahead of the IA Asia Pacific ex Japan sector average of 156.36%. Past performance isn’t a guide to the future.

Lau and his team are conservative in the way they manage the fund and aim to limit losses in a falling market. Their patient investment approach and focus on quality companies means the fund tends to hold up relatively well when markets are volatile but can lag when they’re rising strongly, though it won’t always perform this way.

This has been the case over the past year. The fund’s returns of 13.01% trailed the strong benchmark growth of 20.11% but the fund provided more stability during periods of market volatility, such as in November 2025.

Investments in the technology sector detracted from performance, including IT services providers FPT Corp in Vietnam and Tata Consultancy in India. The fund also suffered from not owning Alibaba, which has performed well amid excitement over its role in AI adoption. The fund has owned the company in the past but Lau has less conviction in the current management team.

Some investments worked well for the fund. Hong Kong bank AIA and Chinese tech giant Tencent, one of the fund’s largest positions, were among the top performers. The recent purchase of H World Group also contributed to performance.

Despite the recent tougher period of performance, the managers are committed to their investment process and continue to only invest in companies that meet their assessment of quality. We believe they have the skill and experience to deliver strong long-term returns to investors, although there are no guarantees.