David Perrett, manager of the M&G Asian fund, joins FundCalibre on the Investing on the go podcast to discuss why Asia remains compelling for long-term investors and how much recent performance reflects fundamentals versus sentiment.
China’s evolving opportunity set is also looked at, the importance of bottom-up stock selection, valuation-driven country positioning and the growing role of domestic consumption across the region. The podcast is rounded up with what investors should realistically expect from Asian equity exposure over a full market cycle.
Why you should listen to the interview: Asia is often viewed as complex and volatile, but this conversation highlights how much the region has evolved. As global assumptions shift, Asia’s role in portfolios may deserve a fresh look.
This interview was recorded on 9 February 2026. Please note, answers are edited and condensed for clarity. To gain a fuller understanding and clearer context, please listen to the full interview.
Interview highlights:
Why Asia remains an attractive long-term investment
“Obviously Asia is for home to a number of large, what we would call AI enablers. You’ve benefiting a lot from the CapEx wave and that helped drive Asian markets particularly second half of last year.
But Asia’s a very diverse region and there are other areas of opportunity, particularly as China deals with its property bubble bursting.
“I’ve been covering Asian markets now for more than 30 years, and apart from a short period in the late 90s after the Asian crisis, Asian currencies, particularly in North Asia, like in China, Korea, even Taiwan, the currencies have never been this attractive or competitive versus Western currencies.
So not only, you know regional markets look attractive compared to the West, particularly for US, but currencies are attractive too.
“The final thing I would also just highlight would be that there are many stocks in the region where the dividend yield, the yield you get from a dividend, companies pay to you are well in excess of what government bond yields are yielding. So again, it’s a very attractive setup for long-term investors.”
Separating macro noise in China
“If you take a sort of more medium term perspective, you’d sort of say this is kind of transitory and in three to six months time people will be less worried about that.
It’s been a really difficult time period for domestic Chinese orientated stocks, particularly for those exposed to consumption. Real estate was a large part of the economy and that’s been pretty depressed as a result and you’ve seen it shrink in materials as a portion of the economy.
But also housing is a large store of wealth for individuals. So it falling in price has also dampened consumer spending.
“A lot of companies have gone bankrupt, but critically importantly, those companies that survived have never been more focused on cashflows and profits.
Nothing like a near death experience to really focus one’s mind. And we saw a lot of that again in the late 90s, early 2000s, where a lot of companies were focused only on the top line before the Asian crisis and coming out of it were much better versions of themselves.
And we’re seeing that happen again now in China, in particular. So we see a lot of interesting opportunities from a bottom up perspective in China of these companies who’ve got lean and mean in a very challenging environment.”
The importance of bottom-up stock selection
“The bottom up focus and stock picking is absolutely essential. Let me give you an example. If I had said to you last year, at the beginning of last year, I’ve looked into the future and what we’re going to see is conflict in the Middle East, no peace in Ukraine and the average tariff will go from zero to 15% into the US, what’s gonna happen to markets?
And you just said, well, thanks for telling me about future, that sounds really negative. And of course what’s happened, we had a boom in markets, right?
“So it highlights not just trying to get the forecast right, but then what’s being discounted by markets. So we are macro aware, we understand the debates and what might be impacting the shares that we invest in from a bottom up perspective.
And we try to work out if people are overly concerned at extremes. So we understand the debates, we’re aware of them, but really what we’re trying to do is just find mispriced opportunities from a bottom up perspective.
“Then from a portfolio construction point of view, we’re very careful to make sure that we don’t have any correlated risk in the portfolio. For example, we might be found six interesting bottom up mid-cap ideas dotted all across the region, but in fact, if we’re not careful, we might have just six Trump tariff losers. Okay?
And so we haven’t got six bets, we’ve only got one. So you need to be aware of these things. So the way to navigate this is to make sure your portfolio is diversified and what’s driving it is single stock risk idiosyncratic, individual stock specific risk, rather than these big macro things which can swing you around day-to-day, week to week every month.”
Long-term potential
“If you look and compare the region today to say 20 years ago, so 20 years ago the region currencies were very much tied to the US dollar had a lot of US dollar debt, it’s had to follow what the US Fed was doing any point in time. So in a way they’re almost a geared play on the US interest rate cycle and movements in the US dollar.
If you go fast forward today, virtually all the currencies in the region now float independently. They have very little US dollar debt and where they do have dollar debt is because they have dollar revenue. And in fact, foreign exchange reserves in the region are very high.
“As we talked earlier, the currencies are basically very competitive too. So my point would be there will always be volatility investing in Asia, but going forward, looking at the macro fundamentals, once you assume there’s considerably less than it has been in the past and you look at the level of valuation in the region, again, it trades a discount to much of the world and particularly the US.
That’s another reason to think that Asia should be quite attractive.”
Conclusion: If you’re considering Asia as part of a diversified portfolio, this interview offers clear, experience-led insight. It cuts through headlines and macro noise to explain where genuine opportunities lie, how risks are managed and why disciplined stock selection matters more than market forecasts.
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The writer’s views are their own and do not constitute financial advice.
This information should not be relied upon by retail clients or investment professionals. Reference to any particular investment does not constitute a recommendation to buy or sell the investment.
Main image: Asia, India, map, globe, christian-lue-2Juj2cXWB7U-unsplash
