Carmignac Portfolio Asia Discovery

Southeast Asian equity markets depreciated in August (BSE Sensex: -4.6%, Kospi: -4.3%), dragged down by the weakness of the Indian and Korean markets.

India continued to exhibit solid momentum, with GDP expanding by +7.8% year-on-year in Q2 2025. However, this robust economic performance was not sufficient to lift the market, which closed the month in negative territory, suffering from President Trump’s decision to raise tariffs on Indian goods to 50%, in retaliation for India’s continued purchases of Russian oil.

Indonesia reported GDP growth of +5.1% in Q2 2025, above estimates. However, many independent economists have questioned the reliability of these figures, citing contradictory indicators such as household consumption and investment. Last month, the Indonesian equity market came under pressure due to

Despite solid economic fundamentals, political tensions, notably violent protests triggered by a controversial reform related to parliamentary benefits — significantly dampened investor sentiment and led to a sharp pullback in equity markets.

In South Korea, after an exceptional start to the year (+24% for the Kospi), markets corrected and gave back part of their earlier gains.

Over the month, the fund posted a negative return, while outperforming its reference indicator

Our Indian holdings weighed on performance during the period, but significantly outperformed the local index thanks to effective stock selection, notably Zinka Logistics. The company reported very strong quarterly results, which drove its share price up by more than 30% over the period.

Similarly, our South Korean portfolio detracted from performance, in line with the broader market. However, the impact was more limited due to our underweight allocation.

Finally, Vietnamese stock Asia Commercial Bank and Taiwanese company Gold Circuit Electronics made positive contributions to the fund’s performance.

Emerging Asia is a vast and diverse investment universe offering fertile ground for active stock selection and attractive growth prospects. We remain positive on Asian small and mid-caps, supported by encouraging macroeconomic indicators, and this is where we have the bulk of our investments.

India remains our largest geographical allocation, providing a highly supportive environment for identifying long-term growth opportunities. Although local markets have recently faced downward pressure due to geopolitical tensions, the outlook for the second half of the year appears more favorable for Indian assets. Moreover, the hostile measures taken by the United States are not expected to materially impact the companies in our portfolio.

We also maintain a significant exposure to companies linked to artificial intelligence, particularly small and mid-cap firms positioned along the semiconductor value chain in Taiwan and South Korea. This segment should benefit from renewed momentum once markets shift back toward a more fundamentals-driven approach.

During the month, we took advantage from market weakness to initiate two new positions: one in Philippine bank BDO Unibank, and the other in Singaporean conglomerate Keppel, which operates across infrastructure, real estate, and connectivity, notably through its data center activities.