Markets are facing many unknowns and potential headwinds this year, with uncertainty around inflation rates and central banks’ next rate moves; a record number of elections being held globally, which could result in unexpected policy changes, greater trade restrictions and escalating geopolitical tensions; and ongoing conflicts in Ukraine and the Middle East.

Periods like this show how difficult it can be to make macro forecasts, and why diversification can be so important for investors.

Considering the macro environment

In our Asian Equity Income strategy, we take into consideration the macro environment, as this allows us to identify the countries and sectors that we think are most attractive and those that we would prefer to avoid. We consider factors including geopolitics and local politics, demographics and business environments, as well as trends that can be beneficial, or detrimental, to certain sectors, such as artificial intelligence.

Once we have identified the countries and sectors that we are comfortable investing in, within those areas, we seek out companies that have high barriers to entry, strong balance sheets, good governance and management teams, and an ability to pay out, and grow, dividends.

Broad exposure across the investment universe

Our investment process results in a highly diversified portfolio of quality income companies, across the Asia Pacific (ex Japan) region, based in both developed and emerging markets. We have broad exposure across a wide range of sectors, including technology, commodities, gold mining, consumer, financials and property, as well as single holdings in areas like defence and utilities.

Through our positioning, we are not taking some kind of “bet” on there being a particular election outcome, or on interest rates cuts being implemented by a certain central bank, for example. Instead, given our diversified exposure, we believe that our portfolio should be well positioned across a range of possible scenarios.

Global and regional revenue exposure

Within our strategy, our revenue exposure is diversified across countries and regions, which could help to mitigate some of the geopolitical risk and election uncertainty.


Our global exposure includes positions in technology companies like Hon Hai Precision, which is the world’s largest electronics manufacturer, with businesses spanning from smartphones to AI data centres; and MediaTek, which is the top provider of smartphone chips globally by volume. We believe that our technology holdings should remain relatively resilient, as they are highly adaptable and continue to generate revenue from across the globe. We also have exposure to sectors like commodities, including miners BHP and Newmont, which have solid balance sheets and offer attractive dividend yields; as well as having financials exposure, including global banks like Macquarie.


At the same time, we invest in several companies that generate local revenues and that we view as being relatively insulated from the global economy, or which play on a theme of “remoteness”. These include positions like Power Grid, an Indian electricity transmission company, which should benefit from India’s ongoing development; and Bank Rakyat in Indonesia, which specialises in microlending, providing services to customers that live very remotely with no alternative safe financing options.

Revenue exposure – Jupiter Asian Equity Income strategy

Holdings Chart for fund strategy

Reducing interest rate risks

We also have diversified exposure in terms of interest rate risk. Some of our positions, including banks (e.g. DBS Group and HSBC) and insurance companies (e.g. Suncorp), have business models that should continue to benefit from higher rates, while other names such as those in the tech sector tend to prefer lower rates.

Gold as a hedge

Elsewhere, we hold a position in the world’s largest gold miner, Newmont, which we view as a kind of hedge against uncertainty, and which has recently benefitted from record-high gold prices.

We also have exposure to ST Engineering, which should benefit from increased government spending on defence if geopolitical tensions do rise further. We like the company due to its defence and Smart City divisions, as well as its aircraft MRO (maintenance, repair & overhaul) business.

High conviction portfolio

We believe that our highly diversified portfolio should be well positioned for a range of macroeconomic scenarios, and we continue to have high conviction in each of the quality income companies that we hold. While we recognise that the next leg of this economic cycle could be more challenging, we still expect to see growth in earnings and dividends coming from a good number of companies held in the strategy. Given our focus on highly liquid companies, if new information or developments lead us to change our minds, we also have the ability to easily and quickly adjust our positioning.

Holding examples are for illustrative purposes only and are not a recommendation to buy or sell.

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