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Strategies for Investment in Asia

Institutional investors on optimizing growth, risk, and returns


Asia’s track record for exceptional growth in the modern era spans from the 1950s to the present. This research explores North American institutional investors’ plans, priorities, and strategies for investment in Asia, as the pressure to pursue performance builds—and demographic forces, political and governance reforms, and the prospect of new multinational trade agreements refocus attention on the region.

Asia is undeniably the world’s fastestgrowing, most dynamic economic region. Asia’s modern track record as a growth powerhouse began in the 1950s and 1960s, when Japan emerged as one of the world’s largest economies in the course of its postwar revival.

From the 1960s through the 1980s, Hong Kong, Singapore, South Korea, and Taiwan—the Four Asian Tigers—carried the region’s growth story forward. All four Asian Tigers enjoyed extraordinarily high, sustained rates of growth as they first industrialized rapidly, then successfully transformed themselves from lowcost manufacturers to advanced economies with large populations of highly skilled, high-income workers. Hong Kong and Singapore today are leading global financial centers and key hubs for international trade. South Korea and Taiwan have become leaders in complex manufacturing.

The region’s economic momentum continued to build over the course of the 1990s, as China and its neighbors in southeast Asia enjoyed manufacturing-export fueled growth rates that far outpaced their counterparts in the West. Meanwhile, India built on its laborcost advantage to become a global leader in information and business services.

Although growth in Asia has slowed in recent years due to a weak global recovery, a slowdown in global trade, and the effects of China’s economic transition, Asia remains an engine of global economic expansion. According to the IMF, Asia now accounts for nearly two-thirds of global growth. A robust labor market, rising disposable incomes, a growing middle class, the prospect of new regional and multilateral trade agreements, and increasing momentum toward political, economic, and governance reforms are among the many factors that are refocusing institutional investors’ attention on Asia.

To explore North American investors’ priorities, plans, and strategies for investment in Asia, Institutional Investor Research, in collaboration with Matthews Asia, surveyed 116 institutional investors based in the United States and Canada. We supplemented survey results with a series of in-depth, one-on-one interviews with senior decision makers at large pensions, foundations, and endowments.

Click here for the full report of our findings.