Can you give an overview of the team running the fund and your investment process?
Our investment team comprises five senior, specialist investment professionals. With the exception of the newest investment analyst, each has between 13 and 26 years of dedicated emerging market investing experience and a strong mix of backgrounds and cultures.
We have a local presence in India and China with Aatman Ajmera based in Mumbai and Andy Chen based in Shanghai.
The Fund's investment philosophy is centred on the concept of Economic Value Added (EVA), which the team believes is the true measure of long-term shareholder wealth creation. The Fund seeks to invest in future ‘Star' companies, businesses they believe have the ability to compound EVA sustainably over the long term.
The Fund is positioned to benefit from an increasingly multipolar global environment, characterised by greater regionalisation of trade, diversification of supply chains and a broader dispersion of economic leadership across emerging markets. The team's robust, repeatable investment process aims to identify those companies best placed to leverage their specific strategic positioning to significantly grow their EVA.
The Fund is built on the belief that companies able to sustain returns on invested capital above their cost of capital over long periods are best positioned to generate durable shareholder returns. Sustainability analysis is therefore integrated into the investment and valuation process, helping assess the longevity, quality and resilience of business models.
What do you see as the big opportunities and risks for your fund for the rest of the year and moving into 2027? How are you positioned in this environment?
The Middle East conflict has reinforced the importance of energy and supply chain security, both of which now have clear economic and strategic implications. We believe this will accelerate investment in renewables, electrification and nuclear power as countries seek to reduce dependence on imported fossil fuels and vulnerable supply routes.
In our view, key beneficiaries include Chinese companies that supply the technologies enabling more domestically resilient energy systems; commodities leveraged to electrification, such as copper and aluminium; uranium given renewed momentum behind nuclear energy; and businesses exposed to broader supply chain diversification.
The Fund already has exposure to rare minerals including uranium and we are in the process of adding more.
More broadly, there has been a shift in soft power away from the US. We are seeing new regional alliances being formed with China deepening its influence across the Global South through its engagement in trade, infrastructure and financing. Iran's willingness to accept renminbi-denominated payments is another incremental sign of the currency's growing international usage and of China's expanding role within the global financial architecture. Against this backdrop, we have been steadily increasing the Fund's exposure to China over the past year.
For some years we have discussed the transition towards a more multipolar world. We believe the current conflict has accelerated that process, reinforcing the importance of regional alliances, energy security and alternative trade and capital flows. China continues to play an increasingly important role in this evolving global landscape and we have positioned the portfolio accordingly.
Can you identify a couple of key investment opportunities you are playing at the moment in the portfolio?
Over the past 18 months we have progressively increased the portfolio's weighting towards North Asia, with incremental capital allocated to China in particular. We continue to see a compelling opportunity set across AI adoption, humanoid robotics and the increasing drive towards semiconductor self-sufficiency.
South Korea remains a key exposure within the portfolio, reflecting its position as a globally competitive high-tech and manufacturing economy, alongside the improving corporate governance backdrop driven by the government's reform agenda, its Value-Up Program.
We continue to see compelling opportunities across semiconductors, AI infrastructure, industrial automation and physical AI, supported by strong earnings growth and attractive valuations despite the market rally. Key holdings include SK Hynix, Samsung Electronics and HPSP, alongside selective exposure to companies leveraged to robotics, energy security and advanced manufacturing themes.
We believe Taiwan has the world's most complete semiconductor and electronics manufacturing ecosystem. Our holdings there include Delta Electronics, Chroma ATE and ASE Industrial Holding.
We retain an off-benchmark allocation to Vietnam, where we have a long-term positive view. Vietnam's GDP growth is projected to grow at 7% in 2026. The country is seeing high foreign investment flows and has a young skilled workforce. We currently hold two stocks in the country: Mobile World, where the investment case is driven by the penetration of modern retailing, and Vietnam Technological and Commercial Joint Stock Bank (Techcombank), a leading private sector bank.
Elsewhere, we have been increasing our exposure to Latin America, particularly Brazil. The region continues to benefit from improving macroeconomic conditions, supportive domestic liquidity and strong demand for its natural resources and strategic commodities. It also remains relatively insulated from the direct effects of the Middle Eastern conflict, while standing to benefit from increasing engagement from both the US and China as competition for access to resources, trade and investment opportunities intensifies.
Polar Capital Emerging Markets & Asia Team
