Key Highlights :
- Asia ex-Japan equities have delivered resilient returns in 2025 despite global disruptions.
- Attractive valuations: trading at 35% discount to global peers.
- Overweight recommendations: China, India, Singapore, Indonesia.
- Earnings growth expected in populous and tech-oriented markets, supported by digitalisation and supply chain diversification.
- Structural tailwinds: AI, green energy, digital infrastructure, and regional de-dollarisation.
Asia ex-Japan has proven resilient in 2025, gaining over 15% year-to-date despite tariff disruptions and geopolitical uncertainty. The region offers both valuation comfort and earnings momentum, making it an attractive opportunity for investors seeking diversification.
Why Asia ex-Japan stands out:
- Attractive Valuations: Forward P/E ratios 35% cheaper than global peers, with stronger balance sheet fundamentals.
- Earnings Growth: Consensus sees 17% earnings expansion in 2026, driven by populous economies (China, India, Indonesia) and tech-heavy markets (Korea, Taiwan).
- Capital Flows: Global iremain underweight; even small reallocations from the US and Europe can meaningfully lift Asia ex-Japan, which is <10% of global indices.
Structural Themes:
- AI & Technology: benefits from semiconductor and digital adoption.
- Green Energy: Policy support in China and India accelerates renewable investment.
- Demographics: Younger populations in ASEAN markets sustain consumption growth.
- De-dollarisation: Shift towards local currencies enhances financial resilience.
Country Focus:
- China: Policy easing and tentative US-China thaw support market .
- India: Strong domestic demand and digitalisation momentum.
- Indonesia: Fiscal support cushions growth slowdown.
- Singapore: Beneficiary of regional capital flows and resilient services.
Conclusion:
With compelling valuations, under-ownership, and long term , Asia ex-Japan offers affluent investors a chance to access growth at a discount. In contrast to developed markets priced for perfection, Asia ex-Japan provides resilience, diversification, and secular upside.
Below are some products for consideration:
Index Fund | BNP Paribas Sri-Kehati |
BNP Paribas IDX Growth 30 | |
Big Cap Fund | Eastspring Investment Value Discovery |
Ashmore Dana Ekuitas Nusantara | |
Offshore Sharia Fund | Manulife Saham Syariah Golden Asia |
BNP Paribas Greater China | |
Batavia India Sharia Equity USD |
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