For technology exposure, think Asia

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The MSCI Asia ex-Japan index is the most technology heavy MSCI index in the world. Technology accounts for 31% of the Asia index versus 23% for MSCI US and a mere 1% of the ASX 200. Most investors are familiar with US technology giants like Facebook, Amazon, Netflix and Google, collectively known as FANG, but how many Australian investors have exposure to STAT? STAT is the Asian version of FANG and stands for Samsung, Tencent, Alibaba and TSMC. These companies also qualify as tech giants with a combined market cap of A$1.5 trillion. Year to date in 2017 these stocks have performed very well, up by 42% on average.

Key points

  • The opportunities in Asia extend far beyond the demand for commodities and consumer products.
  • The rapid growth of disruptive technology within Asia presents an opportunity for Australian investors who struggle to access the thematic via domestic markets.
  • As well as the STAT stocks, we see fantastic opportunities in Baidu (the Google of China) and Naver (the Google of Korea).
  • We also like Apple supply chain companies like Largan Precision (cameras), Hon Hai (assembly) and Goertek (acoustics). These companies are trading at attractive valuations and have strong growth prospects going into the launch of the iPhone 8.

Ellerston Asian Investments (ASX:EAI) is a concentrated large cap portfolio based on high conviction best ideas which is benchmark independent. Providing investors access to high growth opportunities throughout Asia via a highly experienced and specialised team. Find out more here


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