The fund posted very strong performance during the quarter and the fund rose just over 13% in SEK. A significant exposure to small technology companies in Taiwan contributed positively. AI was a major focus area during the quarter and several of the fund’s holdings have links to this area, e.g., Asia Vital Components, King Yuan Electronics, Chroma and Gigabyte Technology.
However, the strongest contributor to fund returns was Taiwanese International Games System, which designs and manufactures software and hardware for arcade and PC games. The company has a strong market position worldwide within this area and continues to steadily increase its revenues and profits.
The Taiwanese hardware company Chicony Electronics, which manufactures keyboards, was also a significant contributor. Strong growth and higher margins are expected during 2024 with the stabilization of the PC market. The Indian travel reservation website MakeMyTrip is another example of a company that contributed to returns. The company is a market leader within its segment in India and has benefited from the growth in flights, train and bus travel, hotels, business travel and international travel.
The largest negative impact on performance was posted by Taiwanese Sinbon Electronics, Lite-on Technology as well as Thai WHA, which develops and manages industrial parks in Thailand and Vietnam.
We have a cautiously optimistic outlook for fund performance ahead due to the many exciting and well-managed small caps in Asia.