Stewart Investors Asia Pacific Leaders: September 2026 fund update

• There was a change to the fund’s manager in 2025

• The new team continues to focus on stewardship and high-quality companies

• We expect the fund to not lose as much money when markets fall

• This fund is not on the Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

The Stewart Investors Asia Pacific Leaders fund aims to grow your investment over the long term by investing in high-quality companies operating in the Asia Pacific region, such as China, India, and South Korea.

In November 2025, the fund moved from the IA Specialist sector to the IA Asia Pacific ex Japan sector. The fund used to invest more in Japan, but it now limits how much it can invest there to 5%, the same as other funds in the sector.

We think the fund could be used for broad exposure to Asia or to diversify a global investment portfolio. Investments in emerging markets add risk and the associated volatility should be considered when building a long-term investment portfolio.

Manager

Following the departure of the fund’s previous managers last year, responsibility for the fund’s management transitioned to FSSA, a sister company of Stewart Investors, in November 2025. The two teams previously worked together as one investment team before splitting in 2015. This meant that their investment philosophy and process were broadly aligned.

Martin Lau and Rizi Mohanty are now the fund’s managers.

Lau has over 20 years of fund management experience across Asia and is an investor we hold in high regard. 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.

Mohanty joined FSSA in 2016 and manages a number of funds that invest across Asia.

The managers receive support from a close-knit team of other fund managers and analysts. Although the responsibilities for both managers increased when the team took over management of Stewart Investors’ funds, we believe that they can handle these responsibilities given the overlap in approach and supportive team dynamic.

Process

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

The team looks 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 that the fund can look quite different to the broader Asian stock market (the benchmark). Over half the fund invests in companies from China and Taiwan. South Korea and India also make up meaningful parts of the fund. Sector wise, technology currently makes up the largest portion of the fund at 37.8%, although this is less than the benchmark. There are also significant investments in financials and consumer discretionary companies.

When making any investment, the managers take a long-term view. 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.

Since becoming managers in November 2025, Lau and Mohanty have made a number of changes to the fund. They sold investments where their view differed from the previous managers and bought shares in companies where they had greater conviction.

Investments sold include Chinese e-commerce platform Alibaba, industrials company SF Holding, and Philippines conglomerate SM Investments. The managers also sold their investment in Indian IT business Tata Consultancy Services over fears the company will be disrupted by artificial intelligence (AI).

New investments in the fund include ICICI Bank in India and Chinese technology giant Tencent. Lite-On Technology, a Taiwanese manufacturer of electrical equipment, was also added as the managers believe the company will benefit from the build-out of data centres to support AI adoption.

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.

Starting in 2025, fund managers have the option to own a share of the FSSA business. We’re pleased that many of the team 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 took responsibility for a number of funds that invest across Asia, which increases their workload as they transition these funds to more closely mirror their existing funds. We’re monitoring the progress of these changes as well as any impact that managing the additional funds has on their responsibilities.

ESG integration

For the team at FSSA, ESG (environmental, social, and governance) 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 that it’s run in a way that will 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, more resilient 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. FSSA has made a firm-wide commitment not to invest in companies whose primary business is the manufacture of tobacco products or controversial weapons.

The team also engages closely with company management. It helps them ensure management remain on track with sustainability initiatives and means they can encourage a change in behaviour if required. If they don’t believe a business meets their standards or is doing enough to address a problem, they won’t invest. The firm produces an annual Responsible Investment & Stewardship report outlining the firm’s voting record, providing engagement updates and case studies, and presenting other ESG-focused research.

Cost

The fund has an annual ongoing charge of 0.86%, but we’ve secured HL clients an ongoing saving of 0.05%. This means you’ll pay a net ongoing charge of 0.81%.

The fund discount is achieved through a loyalty bonus, which could be subject to tax if held outside of an ISA or SIPP. Our platform charge of up to 0.35% per year also applies, except in the HL Junior ISA where no platform fee applies.

Both a buy and sell instruction will be subject to HL dealing charges. Find out more about our charges.

Performance

The philosophy used by Lau and Mohanty at FSSA is similar to that used by the previous managers at Stewart Investors. That means that we expect the fund to perform similarly under the new managers as it did under the previous managers.

Asian markets have performed strongly over the past year. In the 12 months to the end of August 2026, the MSCI AC Asia Pacific ex Japan index gained 36.6%. The fund returned 29.6% over the same period, though not all of this performance can be attributed to the current managers given they took over the fund in November. Past performance isn’t a guide to the future.

While the fund lagged its benchmark, it still delivered attractive returns for investors and performed broadly in a way we’d expect. A focus on investing in quality companies means that we typically expect the fund to offer an element of shelter when markets fall and to rise, but not as quickly, when markets rise rapidly. This has been the case during Lau’s time managing the FSSA Asia Focus fund.

The fund’s investments in technology companies contributed to performance over the past 12 months. Samsung Electronics, MediaTek, and Lite-On have all seen strong demand for their products from spending on AI solutions.

Financials companies detracted from performance, including HDFC Bank in India and Indonesia’s PT Bank Central Asia. Chinese travel platform Trip.com also detracted as consumer demand in China remains weak.