From an investment universe of 3,000 companies, the manager attempts to identify quality securities which are capable of generating solid, steady growth. Any companies operating under conditions of distorted competition are eliminated, as are those whose profitability depends on government regulations. Research then involves an in-depth analysis of all the 1,000 or so companies which have passed through the aforementioned filters. Hence the investment process is essentially qualitative, with much emphasis being placed on visiting the companies.

The portfolio is essentially invested in Hong Kong (28.2%), South Korea (21.5%) and Singapore (12%). With volatility once again on the up and the US economy slowing down, the manager favours diversification and is focussing his investments on quality companies that offer maximum profit visibility. He continues to over-weigh the sectors that are tied in with domestic consumption and health. He has, on the other hand, reduced his investments in the most cyclical markets and shares such as South Korea and Taiwan. Energy and commodities are also two sectors in which the manager has no investments at all. Thus he is approaching 2008 on a cautious note, with a short-term defensive profile and a very strong conviction that there is potential for long-term growth in the region.