Insights

The escalation of conflict in the Middle East is the latest geopolitical shock to test global markets over Scottish Oriental’s 30-year history. This note outlines why the portfolio remains well positioned and what the current environment could mean over the longer term.

Once again, the Scottish Oriental Smaller Companies Trust has been recognised by the Association of Investment Companies (AIC) as an “ISA millionaire” investment trust.

Away from the headlines, thousands of smaller businesses in Asia are quietly compounding their earnings year after year.

In Seoul, our company meetings offered a reminder of the important structural changes taking place in South Korea, beyond the artificial intelligence boom.

Vietnam’s cities rarely pause. It’s a sign the economy has remained resilient despite global trade disruptions and tariff pressures. But what about the longer-term outlook?

In this letter, we explore Scottish Oriental’s recent investments, review the key drivers of performance in 2025, and provide our outlook for the year ahead.

As 2025 marks the thirtieth anniversary of the founding of Scottish Oriental, this is a good time to look back at the history of the Trust and the factors that have helped and hindered our investments in Asian smaller companies during the period.

As incomes rise and consumers’ basic needs are met, companies in certain sectors stand to benefit from increased demand.

Some markets are just starting to get a taste for smaller format stores and pizza, which makes us excited about the potential for some of our investments.

In China, the online music industry is an attractive duopoly while the supply of content is fragmented. This provides online music platforms with strong bargaining power.

Scottish Oriental has been ranked number seven in research by the Association of Investment Companies.

Coined by Kipling and adopted by investor Jim Slater, "elephants can’t gallop" highlights the easier growth potential of smaller companies. Scottish Oriental Smaller Companies Trust has a track record in this area.

The Scottish Oriental Smaller Companies Trust aims for long-term capital growth by investing in smaller Asian companies, using a distinct investment approach since 1988.

Discover how a Kansai Nerolac, India based leading paint company, integrates ESG principles into its operations beyond a tick-box exercise.

The year 2023 turned out to be fairly pedestrian in terms of emerging markets’ performance. The asset class was weighed down by China, which recorded its third consecutive year of negative returns.

Read our India Client Update - October 2023: We shared our learning from investing in India and Solara Active Pharma here.

Read our India Client Update - June 2023: Insights on our Indian investments and market trends Scottish Oriental has identified and analysed.

In a Q&A, our China portfolio managers, Martin Lau, Winston Ke and Helen Chen, discuss investor queries and share insights from recent visits to mainland China.