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The Asia Income process

Mark Williams, Carolyn Chan & Shashank Savla

Investment philosophy

The investment process is based on the belief that the dominant influences on Asian equities will vary as cycles and environments change. The approach is also shaped by the fund managers’ view that the region will generate long-term growth and companies are increasingly paying dividends back to shareholders.

While expectations will alter as events unfold across Asia, the end aim of the investment process remains constant. The process seeks to identify companies that will benefit from the growth in the region, have an attractive yield and trade at an attractive valuation.

To filter the potential universe of stocks and to enable the fund managers to focus resources and time on the areas of the Asia Pacific ex-Japan market that they believe will generate the greatest returns, the fund managers identify what are likely to be the key drivers of equities in the region over the following six to 12 months. They then determine the impact and the winners and losers of these drivers before selecting companies based on yield, earnings growth and cheap valuations. The process is also designed to enable the fund managers to compare companies on a like-for-like basis across countries and sectors.

By targeting at least 1.1 times the dividend yield of the region across the portfolio, the fund managers believe this will ensure the equities they invest in are amongst the more conservative, better managed companies. They do not see the additional yield criteria as leading to low relative returns, as long as it is combined with growth and attractive valuations.

Investment process

There are four stages to the investment process:

  1. 1

    Identify the key drivers for Asia Pacific (ex-Japan) equities

  2. 2

    Create a framework that captures the likely effects of these drivers, both positive and negative

  3. 3

    Analyse individual companies that will benefit from these drivers, looking for those stocks which have relatively high dividend yields backed by strong free cash flows, earnings growth and cheap valuations on an appropriate metric (beyond yield alone)

  4. 4

    Construct the portfolio, diversifying across drivers, countries, sectors and stocks

The investment process is iterative in that the information gleaned from company management and analysis is as important in helping to determine the drivers as it is in stock selection.

The Asia team
The Asia team
 Mark Williams (right), Carolyn Chan (centre) & Shashank Savla (left)

Mark Williams has been managing money since 1993 and has previously run funds at F&C and Occam. Carolyn Chan started her career in 1992 and was previously at Hampton Investment Management before joining Liontrust. Shashank Savla began his career in financial markets in 2004 and has also previously worked in the Consumer Goods and Telecoms industries.

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Key Risks

Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. Investment in Funds managed by the Asia team involves foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The Fund’s expenses are charged to capital. This has the effect of increasing dividends while constraining capital appreciation.


The information and opinions provided should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Always research your own investments and (if you are not a professional or a financial adviser) consult suitability with a regulated financial adviser before investing. 


© 2020 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.  Past performance is no guarantee of future results.

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