Private consumption is now the main driver of economic growth in China. The purchasing power of the Chinese consumer in 2030 is expected to be roughly equal to the level in the US back in 2000 – and its rate of growth is accelerating.

The rise in disposable income is leading to improvements in living standards and increased consumer spending – mainly on services. As a result, services like education, health & wellness, tourism and e-commerce are forming an increasing share of GDP. These services are an important focus for the Fund.

When choosing companies to invest in, we expect they should be able to protect their margins and grow profits consistently over time. If we don’t see that potential, we hold fire.

We also steer clear of companies that are either not serving the consumer or are prone to bouts of over-capacity with a lack of pricing power. A good example would be telecoms, who tend to lack pricing power. Similarly with residential property due to the cyclicality and nature of their pricing.

Services are forming an increasingly dominant share of GDP growth and service companies more commonly have that pricing power . These are currently showing considerable profit growth and are attractive investments for us. It’s exciting to see this theme playing out across South Asia and Emerging ASEAN countries.