The big comeback for Asia’s small caps

Asia’s small caps are making a big comeback, says Grace Yan, Portfolio Manager at Nikko Asset Management. In a recent insight, she examines seven key developments expected to provide momentum to Asian small caps. “Factors that had weighed on these businesses are now turning into tailwinds,” says Yan.

As key drivers for Asia’s small caps Nikko sees the evolving regulatory environment, the shift in focus among ETFs toward smaller companies, increasing personalization, changing consumer trends, friendshoring due to US-China rivalry, the advent of the fifth industrial revolution and beneficiaries of environmental, social, and governance (ESG).

As an example of changing consumer trends, Yan names the Millennials and Gen Z as being the new driving force of consumption. “This generation is not only comfortable with the online consumption of goods and services, but it is also mindful of social justice and climate change while desiring uniqueness and personalisation. Companies that deliver products that meet this fast-changing demand will succeed,” says Yan.

Read the full insight at emea.nikkoam.com.