A breakout rally in Chinese stocks last month, alongside strong performance from Indian and Taiwanese equities has helped Asia ex Japan funds outpace global market indices for the first time in years.
On a trailing six-month basis, the MSCI AC Asia ex Japan index has overtaken the performance of the MSCI World index after years of lagging behind broader developed markets.
The MSCI World index has benefitted from its large exposure to US equities (72.4%), where global tech giants have helped boost the index performance above other developed and emerging markets.
It has been hard for emerging markets in Asia to match this performance over the past several years, especially since Chinese stocks had been dragging down the wider Asian equity markets until recently.
India and Taiwan equity markets had already been strong performers over the past twelve months, but the recent surge in Chinese stocks last month on long awaited stimulus announcements has finally boosted the broader region’s equity markets.
Roughly 75% of the Asia ex Japan index, the widely used benchmark for Asian equity funds, comes from three major regions: China (30%), Taiwan (21.5%) and India (21.5%).
Many Asian funds as a result have delivered strong gains over the past half-year, with many nearly doubling the performance of the MSCI World index.
Strategies from Lombard Odier, M&G and JPMorgan were some with top-ranked returns over the past six months.
Below are 20 of the top performing funds* from the Asia ex Japan equity sectors in Hong Kong and/or Singapore over the past six months, according to data compiled by FSA from FE fundinfo.
| Fund | 6 month return (%) |
| iShares S&P Asia 50 ETF | 29.42 |
| LO Asia High Conviction | 28.61 |
| Xtrackers MSCI AC Asia ex Japan ESG Swap UCITS ETF | 26.4 |
| FSSA ASEAN All Cap | 25.81 |
| M&G Asian G | 23.67 |
| HSBC MSCI AC Far East Exjapan UCITS ETF | 23.59 |
| M&G (Lux) Asian | 23.59 |
| iShares MSCI AC Far East ex-Japan UCITS ETF | 23.38 |
| HSBC Asia Pacific ex Japan Sustainable Equity UCITS ETF | 23.35 |
| ishares BlackRock IshareS MSCI Asia Ex Japan Climate Action ETF | 23.33 |
| SSGA SPDR S&P Emerging Asia Pacific ETF | 22.99 |
| JPMorgan ASEAN | 22.77 |
| HSBC Asia Pacific ex Japan Equity High Dividend | 22.43 |
| Foord Asia Ex-Japan | 21.7 |
| UBS Asia Pacific Equities | 21.7 |
| Man GLG Asia (ex-Japan) Equity | 21.65 |
| UBS (Irl) Fund Solutions plc MSCI AC Asia ex Japan SF UCITS ETF (USD) | 21.54 |
| CIM Dividend Income | 21.39 |
| LionGlobal South East Asia | 21.39 |
| Matthews Asia ex Japan Total Return Equity | 21.23 |
The Lombard Odier Asia High Conviction strategy stands out as a top performing active fund with a 28.6% return over the past six months.
This fund benefited from its concentrated approach and large positions in Chinese internet companies such as Alibaba, Futu, Trip.com, Meituan and Beike.
“These platform leaders were trading at relatively distressed valuations compared to their historical levels, while we believe their fundamentals remain robust,” the managers said in a recent update.
There were also a large number of passive exchange-traded-funds tracking various Asian equity indices, including the best performer the $1.4bn iShares S&P Asia 50 ETF.
This ETF invests in 50 of the largest listed companies in Asia, and benefitted disproportionally more than other Asian equity funds from its 25% position in Taiwan Semiconductor Manufacturing Company (TSMC).
Shares in TSMC have almost doubled over the past year as it benefits from continued demand for artificial intelligence compute and its position in the semiconductor industry.
*The data is based on six month trailing performance ending 21/10/2024. Only funds over $30m in assets under management were included. Only funds that fall under the relevant Hong Kong SFC Authorised Mutual or Singapore Mutual sectors as classified by FE fundinfo were included.