From uncertainty to upside: Why Asia allocators must look beyond the headlines

AsianInvestor (AI): Headlines this year have focused on tariffs, geopolitics and volatility. How are Asian markets holding up through it all?

This is not a coincidence. It reflects a growing maturity in the region and a notable shift in investor behaviour. Rather than overreacting to headlines, there is now more focus on what is actually happening at the company level. Fundamentals are driving decisions. And where investors once might have panicked, they are now asking, "Is this truly material to the business?".

AI: What’s behind this change in investor behaviour?

VP: I think we have entered a phase I would describe as “crisis fatigue”. After years of absorbing shocks – from the pandemic to policy pivots to geopolitical tensions - investors have learned to filter the noise. They have become more discerning.

It is not that risks don’t matter – they do. But the bar for what moves portfolios has risen. Investors are prioritising what is durable: pricing power, management quality and cash flow resilience. Those attributes tend to shine through, even when macro conditions are choppy. The ability to tune out distractions and stay focused on facts and fundamentals has become a competitive edge.

AI: Where are you seeing opportunities across the region?

VP: There are multiple engines running in Asia; and they are not all in sync. That is precisely where opportunities arise.

In Taiwan and Korea, the demand for AI infrastructure and semiconductors continues to drive momentum. These are no longer niche sectors – they are foundational to the next wave of innovation. But the real story is not just chips. It is about companies with scale, execution and the ability to reinvest in innovation.

India, by contrast, offers a different proposition. It is a large, inward-focused economy powered by consumption. Many of the most interesting companies are domestic champions, not exporters. That matters when global trade is under pressure. Even when an additional 25% US tariff on certain Indian goods was recently applied, markets took it in stride. That tells you something about confidence in India’s long-term story.

AI: Southeast Asia hasn’t been in the spotlight lately. Are investors overlooking something?

VP: It is easy to get distracted by headlines, but in Southeast Asia, there are compelling stories beneath the surface. These markets may lack large-cap tech giants, but they offer something else: businesses quietly consolidating fragmented sectors, improving operational leverage and gaining market share.

Think of it this way: if you only look at the region through the lens of indices or country ETFs, you will miss what is really happening. It is at the stock level, not the macro level, where the most interesting changes are unfolding. That is why bottom-up research is critical in this part of the world.

AI: How important is diversification in this environment?

VP: More important than ever. Asia is not just one market, or a single story – it is many. Different economies, different drivers, different levels of sensitivity to interest rates, commodity prices and geopolitics.

Diversification gives investors the flexibility to stay invested while managing risk. And it also prevents over-concentration in a single theme or narrative. For example, you might have exposure to India’s domestic consumption story, Taiwan’s semiconductor cycle and Southeast Asia’s structural reforms – all within one portfolio. That is the beauty of investing across Asia today – you don’t need to choose a winner. You can construct a mosaic.

AI: How are investors managing ongoing uncertainties – tariffs, rate cycles and politics?

VP: Investors are increasingly focused on what they can control. Forecasting policy moves or global elections is difficult. And even when you get the prediction right, markets might react differently than expected.

What we are seeing instead is a return to basics: understand your businesses deeply, stay close to your watchlist, and be ready to act when price and value disconnect. Many investors today are sitting on dry powder, not out of fear, but out of discipline. They are waiting for moments of dislocation. And when they see companies trading below intrinsic value, they are stepping in.

It is about preparation, not prediction.

AI: For long-term investors considering Asia, what’s your message?

VP: Asia remains a region of growth, innovation and reinvention. But that doesn’t mean everything goes up in a straight line. There will be volatility. The key is to have a framework that filters noise and stays anchored in fundamentals.

What is encouraging is that more investors are embracing that mindset. They are asking the right questions: Does this business generate cash? Can it reinvest that capital well? Is management aligned with shareholder? That kind of thinking isn’t reactive – it is constructive.

We are seeing more long-term investors treating Asia not as a tactical allocation, but as a core part of their global portfolios. And I think that is a very healthy evolution.

AI: M&G Investments’ Asia Pacific equities platform is gaining visibility in the region. How would you describe your approach?

VP: We are long-term, fundamentals-driven investors. That is not just a tagline – it defines how we spend our time. We dig into financial statements, we meet management and we model cash flows. We are looking for businesses that can grow intrinsic value, not just next quarter’s earnings.

What sets us apart is our conviction and our patience. We don’t try to chase momentum. We don’t anchor to market noise. And we are always refining our watchlist – so when opportunities come, we are ready.

Our team benefits from the global discipline of M&G, but our lens is regional. We are on the ground, speaking to companies and building relationships. That combination of global standards and local knowledge is powerful.

To find out more about M&G’s Asian capabilities, connect with us at [email protected], and follow us on LinkedIn to receive more M&G Insights.

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