Four ways to invest in Asia – and why active management matters

By James Yardley on 15 July 2026 in Asia/Emerging Markets

Asia has huge potential for investors. Robust GDP growth, a booming middle class and a vital role in the global tech boom make it impossible to overlook. But it’s also under-researched and less efficient than developed Western markets. This makes choosing winners from thousands of listed companies a challenge.

That’s why we believe actively managed funds are a sensible choice for investors seeking exposure to Asia, as they can scour the region for the best opportunities.

What do active managers provide?

First, let’s start with a reminder of the benefits provided by experienced active managers whose focus is investing across the Asia Pacific region. Investment houses with huge global resources have an advantage when it comes to gathering information because they can obtain more in-depth information. On-the-ground analysts with years of experience can help uncover hidden gems, innovative approaches and important sector trends.

This enables them to:

• Decide how much to invest in particular countries and regions.
• Respond to changing economic conditions, such as interest rate movements.
• Choose the right times to buy and sell stocks.
• Access opportunities that have been overlooked by rivals.
• Embrace different investment styles, such as growth and value.

Why active is particularly important in Asia

Asia is one of the most diverse investment regions in the world, yet, many companies across the region remain under-researched, particularly in ASEAN markets, where analyst coverage is often limited*. This means share prices can take longer to reflect improving fundamentals, giving experienced managers the chance to identify attractive businesses before they become widely recognised. Local research teams and company meetings can also provide insights that are difficult to gain from simply tracking an index.

Another consideration is the composition of Asian indices. They tend to be heavily concentrated in a handful of countries, sectors and large companies, meaning investors may miss much of the region’s broader opportunity set.

Active managers can look beyond these benchmarks, investing in smaller or overlooked businesses with strong long-term growth potential while avoiding areas they believe have become overvalued. In a region evolving as quickly as Asia, complexity is an advantage for skilled active managers, not an obstacle.

How to choose your approach

There are different ways to get access to Asia. Which one is most suitable will depend on your investment goals, attitude to risk, and existing holdings.

• General exposure
• Income-focussed
• Build-your-own
• Diversified approach

Option one: General exposure

There are more than a 100 funds in the IA Asia Pacific ex-Japan sector. Their investment approaches may differ, as well as country, sector and stock allocations. You’ll need to decide what exposure you need and then look for a fund to match. It’s also important to look at the track record of the managers under different conditions.

One of our favoured names is FSSA Asia Focus. This is a high-conviction stock-picking fund investing in the shares of Asian firms with sustainable and predictable growth. Its experienced co-managers, Martin Lau and Rizi Mohanty, focus on governance – an important consideration for emerging areas – and investing in quality companies.

An alternative is Federated Hermes Asia ex Japan Equity. Jonathan Pines, its lead manager, actively invests in stocks with potential that are currently out of favour. This contrarian approach differentiates him from rivals. It also illustrates what can be achieved over the long-term from active management in a region that has so many possibilities.

Option two: Income-focused

Income investors are also drawn to Asia as part of a globally diversified strategy. Higher dividend yields and improving corporate governance are among the attractions. There are plenty of good options in this area, but we like the relative stability offered by the Schroder Oriental Income Trust, which aims to provide income and capital growth. Richard Sennitt, its lead manager, focuses on companies that have attractive yields and growing dividend payments. His remit enables him to include those in Australia and New Zealand. We believe Richard’s experience, combined with the strength and depth of Schroders’ analyst team, makes this trust stand out from its peers.

The Guinness Asian Equity Income fund is another contender. This portfolio invests in 36 stocks and adopts a one-in, one-out policy. Its managers try to balance the risks involved by investing in companies with proven records of generating returns in excess of the cost of capital.

Option three: Build-your-own

Another option is to invest in a handful of funds, each of which focuses on a particular country or investment style.

An obvious place to start, given its dominant position in the region, is China. The FSSA All China fund is relatively unique in that it invests across the whole spectrum, including the vast A-share market that’s often ignored by international investors. The management team, led by Winston Ke, invests in long-term, sustainable growth opportunities, with a heavy emphasis on high-quality business and management teams.

India is another fast-growing area that deserves consideration. The Ashoka India Equity Investment Trust aims to achieve long-term capital growth by investing in companies of all sizes. We like its ability and willingness to go deeper into the mid and small-cap markets. While riskier than more established names, they offer more potential upside.

Of course, you may want to consider adding exposure to Japan as a satellite position. Comgest Growth Japan is a concentrated portfolio of 30-40 high-quality, long-term growth companies. Its managers believe the country is full of under-researched companies with great capital discipline, barriers to entry, and growth opportunities.

Another option is to look further afield to frontier markets. The T. Rowe Price Frontier Markets Equity fund provides investors with excellent exposure to frontier markets, which have shown a surprisingly low correlation with emerging and developed markets.

A final component in the build-your-own approach is a fund that can invest in Asian companies of all sizes, and we like Man Asia (ex Japan) Equity. Its manager, Andrew Swan, runs a portfolio of 35-45 stocks and can invest across different investment styles.

Option four: Diversified approach

Alternatively, you can select a global emerging markets fund that has Asia as one of its geographic positions, alongside other developing areas.

The M&G Global Emerging Markets fund currently has around 21% in China, 17% in South Korea and 14% in Taiwan, alongside exposure to Brazil, Mexico and South Africa**. We like this fund’s excellent long-term performance and the fact the managers believe that real cash flow is particularly important in emerging markets, given the unpredictable nature of these areas.

*Source: Eastspring investments, May 2026
**Source: fund factsheet, 31 May 2026