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Investing in Asian Small Caps

Elina Fung and Alex Kwan discuss if recent rotations can last and why they are optimistic about Asian small cap’s long-term prospects.
16 June 2021
    Download the full reportPDF, 1.44MB

    Summary

    • On a year-to-date basis, Asian small caps have advanced 17.1 per cent in the first five months, compared with a 6.5 per cent increase in the large-cap benchmark for the same period amid global liquidity support
    • Against the backdrop of a brightened global economic outlook due to rapid vaccine rollouts, we believe Asian small caps have the potential for further growth as the asset class traditionally performs better in an economic recovery cycle
    • A steady rise in the US treasury yield has prompted some global investors to reposition their exposure to Asian equities, with foreign investors repurchasing USD13 billion of Asian equities (ex-China) so far this year