Top-down Guidance

In our search for investment opportunities we apply a broad ‘top-down’ guidance following active consideration of what are, in our opinion, the major forces at work in the world.  This helps us identify long term investment themes and secular trends.

When analysing the Asia Pacific region from a macro perspective, we concentrate on those economies that we regard as having both domestic political stability and an institutional framework that supports a solid macro outlook.

Furthermore, to identify industry sectors with attractive growth prospects, we continually review and consider the implications of macro factors such as economic policy, changing technology and demographic trends.  Examples of the major trends we currently regard as important include:

• Growing domestic consumer demand, particularly in China, India and S.E. Asia;
• Growth in intra-regional trade;
• Emerging Asian brand names;
• Demographic trends; and
• Globalisation. 

For example, in China our focus is on companies that stand to benefit from increasing affluence by catering to local demand for goods and services whilst in Australia our focus is on beneficiaries of the ageing population such as healthcare and financial services.

This ‘top-down’ review helps set the investment scene and mark out prospective areas.  However, it is not a substitute for the rigorous ‘bottom-up’ analysis and valuation we undertake to identify and select individual company investments.