| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 13% | 13.5% |
East Capital's emerging and frontier market funds delivered strong Q2 2026 performance with alpha of 13% and 3.3% respectively, driven primarily by Korean and Taiwanese semiconductor exposure. Korea and Taiwan overtook China to become the two largest markets in the MSCI Emerging Markets Index, together accounting for over 50% of the benchmark by June. The main return driver has been significant upward revisions in earnings expectations for memory chip manufacturers, with the manager expecting memory prices to rise 40-50% quarter-on-quarter in Q3 2026 as agentic AI drives insatiable token demand. Despite reducing Korean memory positions from 4-5% to 1% due to retail-driven volatility, the fund remains slightly overweight based on continued earnings upgrade expectations. Beyond semiconductors, the manager initiated positions in overlooked opportunities including Korean K-Beauty names and Nigerian banks trading at 3-5x earnings with 27-29% ROE. Valuations across India, China and Brazil have become more attractive, with numerous high-quality companies correcting despite strong fundamentals. The frontier market fund trades at 6.6x forward earnings with expected 15% earnings growth.
East Capital maintains a country-neutral approach focused on constructing portfolios within each major market aligned with benchmark weights, believing macro predictions on country performance are unreliable for generating alpha. The fund is positioned for the AI build-out through exposure to Korean and Taiwanese semiconductor and component manufacturers, particularly memory, where the manager expects continued pricing power and earnings upgrades as capacity constraints persist into 2028. Beyond AI, the manager is finding overlooked opportunities in markets like Korea, India, Brazil and Nigeria where valuations have corrected despite strong fundamentals.
The manager believes the backdrop for emerging markets remains constructive with valuations even more attractive than at the start of the year, particularly in India and China. Despite less compelling top-down narratives in these markets compared to Korea and Taiwan, numerous individual investment opportunities exist where valuations have corrected despite strong fundamentals. Frontier markets offer one of the most compelling combinations of structural earnings growth, improving macroeconomic fundamentals and deeply discounted valuations among global equities. The manager expects continued earnings upgrades in memory as tightness persists, with improving conditions across many markets characterized by easing inflation, improving policy credibility and recovering investor confidence.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 8 2026 | 2026 Q2 | 000660 KS, 005930 KS, 009150 KS, 021240.KS, MU | AI, emerging markets, frontier markets, Memory, Nigeria, semiconductors, South Korea, Taiwan |
005930.KS 000660.KS 009150.KS 021240.KS |
East Capital delivered 13% alpha in Q2 2026 through concentrated exposure to Korean and Taiwanese semiconductor manufacturers benefiting from AI-driven memory demand. The manager expects memory prices to rise 40-50% in Q3 2026 as capacity constraints persist into 2028. Beyond semiconductors, the fund is adding overlooked opportunities in Korean consumer names and Nigerian banks trading at 3-5x earnings with 27-29% ROE, while valuations across India and Brazil have become increasingly attractive. |
| Apr 13 2026 | 2026 Q1 | KAP | Asia, emerging markets, frontier markets, Middle East, oil, semiconductors, uranium | KAP.L | East Capital delivered positive alpha in volatile Q1 2026 as Middle East conflict disrupted strong start. Oil spike hurt commodity-importing emerging markets while benefiting exporters like Kazakhstan. Semiconductor strength in Taiwan and South Korea continues on AI demand. Disciplined positioning adjustments and frontier market diversification provided resilience. Outlook hinges on geopolitical resolution. |
| Jan 15 2026 | 2025 Q4 | 000660.KS, 005930.KS, 8306.T, NVDA | AI, China, emerging markets, frontier markets, Korea, Memory, Outperformance, Valuations | 000660 KS | East Capital delivered exceptional 2025 performance with emerging markets up 34% and frontier markets up 47%, outperforming S&P 500 by 16.5%. Korean memory stocks and Chinese AI capabilities drove returns. Managers see continued opportunity as investors seek alternatives to expensive US markets, with emerging markets offering superior growth at attractive valuations while global allocations remain light. |
| Oct 8 2025 | 2025 Q3 | 000660.KS, 300750.SZ, BABA, GOOGL, MSFT, NVDA, TSM | AI, China, emerging markets, frontier markets, rates, semiconductors, technology | - | Emerging markets experiencing strongest performance since 2017 driven by AI boom and Fed rate cuts in what managers characterize as a melt-up rather than bubble. Chinese tech leaders like Alibaba remain undervalued despite strong gains while semiconductor leaders TSMC and Hynix benefit from AI capex surge. Supportive macro backdrop continues with weaker dollar and falling rates favoring emerging market AI enablers over expensive US peers. |
| Jul 7 2025 | 2025 Q2 | F, PRX, TSM | China, Currency, emerging markets, frontier markets, Taiwan, tariffs, Trade Policy | - | East Capital sees emerging and frontier markets in a sweet spot after exceptional Q2 performance. Taiwan and Korea led gains while Trump's tariff bark proved worse than bite. Favorable macro conditions including dollar weakness and dovish Fed support continued outperformance versus expensive US equities. Innovation shifting to emerging markets creates long-term value opportunity. |
| Apr 10 2025 | 2025 Q1 | 1211.HK, BABA, TSLA, TSM | AI, China, Eastern Europe, emerging markets, frontier markets, tariffs | - | East Capital sees compelling emerging market opportunities despite tariff volatility. China leads with AI breakthroughs and economic stabilization, while Eastern Europe benefits from reduced war premiums. The manager rotates from overvalued tech into quality non-tech names, maintaining discipline amid trade tensions. Light investor positioning creates outperformance potential if tariff situation improves. |
| Jan 14 2025 | 2024 Q4 | 1211.HK, 300750.SZ, FPT.VN, NVDA, TSM | AI, alpha, China, emerging markets, frontier markets, India, sustainability, Taiwan | - | East Capital delivered strong alpha across all funds in 2024 through differentiated market-specific investment approaches. Taiwan led with AI-driven gains, China surprised with 19.7% returns, and India generated largest alpha through stock selection. Emerging markets offer compelling value at historical valuations with 14% projected 2025 earnings growth versus expensive developed markets. |
| Oct 9 2024 | 2024 Q3 | BABA | Asia, China, emerging markets, policy, rates, Stimulus | - | East Capital capitalized on China's surprise policy stimulus with their rebranded China fund returning 27.9% in Q3. The coordinated government response including potential USD 140 billion fiscal injection drove MSCI China up 23.6%. Combined with Fed rate cuts enabling emerging market easing cycles, the firm sees a positive backdrop while maintaining cautious optimism pending concrete fiscal evidence. |
| Jul 5 2024 | 2024 Q2 | 005930.KS, NVDA, TSM | AI, Asia, China, emerging markets, India, semiconductors, Taiwan, technology |
TSM 1765.HK |
East Capital sees emerging markets benefiting from AI-driven growth in Taiwan, China's technical recovery, and India's structural expansion despite high valuations. TSMC's pricing power and Korean infrastructure plays drove strong performance. The firm maintains selective positioning while expecting continued outperformance from the diversified combination of growth, technology exposure, and value opportunities across the region. |
| Apr 9 2024 | 2024 Q1 | BABA, NVDA, TSM | AI, Buybacks, China, emerging markets, India, Recovery, semiconductors, Taiwan | - | East Capital posted strong Q1 returns driven by AI momentum in Taiwan and tentative China recovery. TSMC remains attractively valued despite 27% YTD gains, while Chinese companies pivot to shareholder returns with Alibaba's massive buybacks. India's structural story intact despite small-cap volatility. Manager building AI positions while awaiting China property stabilization for sustained rally. |
| Jan 15 2024 | 2023 Q4 | 002594.SZ, 300750.SZ, TSLA | China, Electric Vehicles, emerging markets, frontier markets, India, rates, Valuations | - | East Capital sees compelling opportunities in emerging and frontier markets driven by expected Fed rate cuts, attractive valuations, and superior growth prospects. China offers alpha opportunities despite real estate headwinds, with selective stock picking in companies with international exposure. Frontier markets trade at record-low 9x P/E while India's rising index weight creates new dynamics. |
| Oct 9 2023 | 2023 Q3 | GSK | China, emerging markets, frontier markets, rates, real estate, Turkey, Yields | - | Emerging markets showed resilience in Q3 despite Fed's higher for longer driving yields to 4.6%. China faces real estate structural issues but exports remain strong with concrete policy support emerging. Turkey's orthodox policy return and retail boom notable. Portfolio focused on high-quality Chinese exporters. Stronger EM fundamentals and lower valuations create opportunity once China stabilizes and US yields peak. |
| Jul 7 2023 | 2023 Q2 | - | AI, China, emerging markets, geopolitics, growth, India, Solar, Valuations | - | East Capital sees opportunity in emerging markets as AI hype fades and Fed hiking cycle peaks. China trades at attractive 11-13x PE with 22-24% earnings growth despite geopolitical headwinds and slowing economy. India and Greece show strong momentum while solar energy demonstrates exponential growth. Manager expects H2 shift toward superior emerging market growth and valuations. |
| Apr 14 2023 | 2023 Q1 | BABA | China, emerging markets, Energy Transition, Geopolitical, rates, sustainability, volatility | - | East Capital sees emerging market value despite volatile 'fat and flat' environment. China's reopening and regulatory normalization, particularly Alibaba's restructuring, offer upside potential. Energy transition dominance in China contrasts with European independence efforts. High geopolitical tensions remain a headwind. The firm maintains concentrated, off-benchmark portfolios targeting quality names with strong fundamentals and earnings clarity. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIThe fund is positioned for accelerating token consumption driven by agentic AI deployment across enterprises. Hyperscalers will be forced to invest heavily in data centers to meet insatiable demand for tokens, with approximately 30% of their capex flowing to memory in 2026 versus 8% in 2024. The manager expects memory prices to rise 40-50% quarter-on-quarter in Q3 2026, with capacity constraints persisting into 2028. |
Data Centers Memory Semiconductors Cloud |
MemoryThe fund maintains a slight overweight in Korean memory names despite reducing positions from 4-5% to around 1% due to volatility concerns. The manager believes earnings upgrades will continue as memory tightness persists into 2027, with Hynix and Samsung expected to generate almost USD 1 trillion of free cash flow over three years against a combined market cap of USD 2.6 trillion. Memory prices are expected to rise significantly with capacity remaining constrained well into 2028. |
Semiconductor Cycle South Korea Taiwan | |
South KoreaKorea delivered 119% returns year-to-date and became cheaper as earnings expectations were revised upward. The fund reduced exposure due to retail-driven volatility from leveraged ETFs but remains slightly overweight. Beyond memory, the manager initiated positions in overlooked opportunities including K-Beauty names like APR which delivered 174% year-on-year growth in Q1, and Coway trading at single-digit P/E multiples. |
ETFs Beauty Semiconductors | |
TaiwanTaiwan overtook China to become one of the two largest markets in the MSCI Emerging Markets Index, accounting for over 50% of the benchmark together with Korea by end of June. Performance was driven by significant upward revisions in earnings expectations, with more hyperscaler capex flowing to Taiwan for chip production and components. Strong stock picks in Taiwan were a major driver of the fund's 13% alpha in Q2 2026. |
Semiconductors Components | |
NigeriaNigerian banks Guaranty Trust Bank and Zenith Bank were among the largest contributors to relative performance, rising 19% and 23% respectively. Despite this performance, both banks continue to trade at highly attractive valuations of 3-5x 2026e earnings and 0.8-1.2x book value while generating returns on equity of 27-29% and dividend yields approaching 11%. The manager's trip to Lagos reinforced a positive long-term outlook as reforms increasingly translate into tangible improvements. |
Banks Dividends Value | |
IndiaIndia has derated along with China, making valuations more attractive than at the start of the year. The manager found that the fundamental situation on the ground is not nearly as bad as the common market narrative and weak market performance would suggest. There are numerous individual investment opportunities where valuations have corrected despite strong fundamentals. Lower oil prices would particularly support India. |
Value Oil | |
BrazilThe environment in Brazil was more cautious, with the rate cycle and October presidential elections dominating conversations. Local investor sentiment appears overly pessimistic. The manager found many high-quality companies that had sold off strongly despite strong fundamentals, with valuations remaining attractive for high-quality compounders that can grow regardless of the political backdrop. |
Rates Quality Value | |
OilOil prices are currently below pre-war levels, with the International Energy Agency forecasting a surplus of 5 million barrels per day by 2027 which could place further downward pressure on prices. This would support most of the fund's markets, particularly India and the ASEAN region. The manager believes this important factor is being overlooked by the market. |
Natural Gas ASEAN | |
| 2026 Q1 |
OilOil prices spiked 75% in March due to Middle East conflict disrupting the Strait of Hormuz. This raised concerns about higher inflation and interest rates, negatively impacting emerging markets which are major commodity importers. Kazakhstan benefited as an oil exporter. |
Oil Commodities Inflation Middle East |
SemiconductorsRising chip prices highlighted the dominant competitive position of chip makers, driving huge earnings revisions and inflows into Taiwan and South Korea. Capital expenditure on AI data centers and Q2 2026 chip orders continue to exceed expectations. |
Semiconductors Taiwan South Korea AI Data Centers | |
UraniumKazatomprom, the world's largest and lowest-cost uranium producer, returned 44% as energy prices rose and interest in nuclear power picked up. The company is trading at a significant discount to US peer Cameco. |
Uranium Nuclear Energy Kazakhstan | |
| 2025 Q4 |
AIAI developments from major companies are causing rapid market changes and stock price declines for quality businesses. The manager sees AI creating potential headwinds for software companies through reduced seat counts, lower pricing power, and competition from AI-first upstarts. However, believes many software solutions cannot be easily replaced and is reviewing opportunities in the wreckage. |
Software Disruption Valuation Competition Technology |
SoftwareSoftware companies are experiencing significant declines as the market reassesses AI impacts. The manager identifies three vectors of negative impact: fewer seats due to efficiency gains, lower pricing power from AI competition, and reduced new customer bookings. Despite headwinds, believes there are software solutions that won't be easily replaced by AI. |
SaaS Pricing Competition Disruption Valuation | |
| 2025 Q3 |
AIAI boom continues to power market performance with hyperscalers increasing capital expenditure guidance significantly. Microsoft raised capex outlook from $85B to $100B while Google increased from $75B to $85B. Chinese companies like Alibaba offer competitive large language models and are investing heavily in AI cloud infrastructure with triple-digit growth in AI cloud revenues. |
Cloud Data Centers Semiconductors Enterprise Software |
ChinaChinese equity market experienced liquidity-driven rally with 21% surge in Q3, driven by retail investor shift from deposits to equities rather than economic fundamentals. Tech leaders like Alibaba remain undervalued despite strong performance, trading at reasonable valuations while maintaining dominant market positions in e-commerce and cloud services. |
E-commerce Cloud Technology Liquidity | |
SemiconductorsTaiwan and South Korea markets delivered strong returns driven by AI momentum and increased hyperscaler spending. TSMC benefits from leading-edge chip manufacturing monopoly and has raised prices 5-15% due to demand. Hynix produces 90% of memory for Nvidia AI chips and benefits from memory price upcycle. |
Memory Foundries AI Pricing Power | |
RatesFed resumed interest rate cutting cycle with markets anticipating two more cuts before year-end. Lower rates serve as significant catalyst for emerging markets by easing currency and inflationary pressures, enabling central bank rate cuts and reducing borrowing costs for companies to pursue growth investments. |
Monetary Policy Emerging Markets Currency Growth | |
Emerging MarketsEmerging markets experiencing strongest performance since 2017 with 28% YTD gains, supported by weaker dollar and falling global interest rates. Many AI enablers and technology leaders are based in emerging markets and trade at significantly more reasonable valuations than US peers. |
Valuation Technology Performance Dollar | |
Frontier MarketsFrontier markets maintained strong momentum with 15% Q3 return and 38% YTD gain. Rally led by Vietnam amid growing anticipation of potential FTSE Emerging Markets Index inclusion. Valuations remain attractive with forward P/E of 6.5x representing record-high discounts of 53% and 68% versus emerging and developed markets. |
Vietnam Valuation Index Inclusion Performance | |
| 2025 Q2 |
ChinaChina was worst hit by tariffs but has significant leverage through rare earths control (61% mining, 91% refining). China's rare earth export restrictions impacted US auto supply chains, forcing Ford to shut a factory. Tariffs have come down to 32% on weighted basis with scope for further reductions. |
Rare Earths Trade Policy Auto Parts |
Trade PolicyTrump's tariff announcements on Liberation Day appeared worse than implementation. Sharp rise in US bond yields forced 90-day tariff delay until July 9th. Some bilateral deals announced with UK and Vietnam, though extension uncertainty remains. |
Tariffs United States Sanctions | |
TaiwanTaiwan was largest emerging market driver with 26.3% return in Q2. Currency appreciated 13.9% as foreign investors bought local shares and exporters reduced USD holdings. TSMC results continued improving with 48% year-on-year revenue growth in April 2025. |
Semiconductors Currency TSMC | |
South KoreaKorean market delivered 32.8% return driven by anticipation and election of business-friendly government supportive of cryptocurrency and AI. Korean index achieved strongest performance in 26 years. |
Crypto AI Government | |
| 2025 Q1 |
AIChina's DeepSeek AI model emerged as a standout performer, ranking first globally among large language models while being significantly cheaper than US alternatives. Chinese companies are widely adopting the open-source technology with positive results, and the government has embraced it for healthcare applications. |
DeepSeek LLM Open Source API Reasoning |
Trade PolicyTrump's Liberation Day tariff announcement imposed baseline 10% tariffs on all countries with higher rates for key trading partners. China announced willingness to retaliate, creating market volatility. The extent of Trump's willingness to negotiate remains uncertain, though some flexibility has been indicated. |
Tariffs Liberation Day Retaliation Negotiation Trade War | |
Electric VehiclesBYD launched its God's Eye self-driving technology available on vehicles including the $10,000 Seagull model, demonstrating China's competitive advantage in cutting-edge technology despite chip restrictions. This contrasts with Tesla's $8,000 self-driving feature and higher vehicle prices. |
BYD Self-driving God's Eye Seagull Autonomous | |
ChinaChina was the standout performer in Q1 with 15% returns, driven by AI developments and signs of economic stabilization. Housing prices appear to be stabilizing, and the manager sees significant value provided the government continues gradual stimulus measures. |
Stimulus Housing Stabilization Value Recovery | |
| 2024 Q4 |
AITaiwan was the standout performer driven by AI theme, with TSMC reaching USD 1 trillion market cap and returning 74% due to sophisticated AI chips for Nvidia offering higher margins. The AI theme drove significant investor interest and earnings revisions. |
Semiconductors Taiwan Nvidia Margins |
ChinaChinese market ended up 19.7% outperforming developed markets. Government understands the situation and acted forcefully to address key issues, putting a floor under the stock market. Expected incremental improvements through 2025 supported by attractive valuations. |
Government Valuations Recovery Policy | |
IndiaIndia was the largest alpha generator with holdings returning 41% versus 11% benchmark. Benefits from strong structural growth and thriving local investor base. Over 1,000 companies with market cap over USD 5 billion, still finding attractive companies at reasonable valuations. |
Growth Valuations Alpha Structural | |
VietnamVietnam experienced challenging year with market down 5.4% but fund holdings returned 29% driven by IT company FPT achieving 75% return. FPT is largest position at nearly 10% weight in the frontier markets fund. |
Technology Alpha Concentration | |
Energy Transition2024 was challenging for sustainability with negative rhetoric from US and scrutiny of renewable project returns due to rising rates. Generated substantial alpha in other sustainability themes like recycling, water treatment, education, and healthcare rather than pure-play renewables. |
Renewables Sustainability Healthcare Water | |
| 2024 Q3 |
ChinaChinese government announced broad coordinated policy response including bank reserve cuts, interest rate cuts, new capital market tools, and potential USD 140 billion cash injection. Market rally driven by short covering and retail investor optimism, with MSCI China returning 23.6% in the quarter. |
Stimulus Policy Valuations Rally Sentiment |
RatesFed's historic jumbo interest rate cut allowed many emerging market countries to start cutting rates as well, with Philippines and Indonesia being first to do so in September. Falling rates provide positive backdrop for emerging market equities. |
Fed Cuts Emerging Growth Backdrop | |
| 2024 Q2 |
AIAI remained the primary driver of emerging market returns, with Taiwan contributing significantly through TSMC's advanced chip production for Nvidia. The firm researched AI infrastructure bottlenecks, identifying electrical transformers as key constraints and investing in Korean transformer exporters. |
Semiconductors Chips Infrastructure Taiwan Korea |
SemiconductorsTSMC announced price increases for advanced chips and packaging, which was welcomed by Nvidia's CEO. The firm expects 25% revenue growth versus consensus of 21-22% and views the stock as reasonable at 10x EBITDA for next year. |
TSMC Foundries Pricing Taiwan Manufacturing | |
ChinaChina entered a technical bull market, up 20% from lows as sentiment improved from extremely negative to quite negative. Government policy measures include expanding real estate conversion programs from $41bn to $69bn to reduce inventory levels. |
Recovery Policy Real Estate Sentiment Valuations | |
IndiaIndia added another $1 trillion in market cap with domestic inflows of $28.5bn in H1 2024 versus $22.3bn for all of 2023. Election volatility was quickly absorbed as domestic investors continued strong participation despite high valuations. |
Growth Domestic Flows Elections Valuations | |
| 2024 Q1 |
AIAI remained the primary driver of market returns in emerging markets, with Taiwan contributing significantly due to TSMC's AI chip production for Nvidia. TSMC expects AI to represent high-teens percentage of revenue by 2027 with demand outpacing capacity planning. The manager sees continued opportunities in reasonably priced AI-related stocks. |
Semiconductors Taiwan TSMC Nvidia Growth |
ChinaChina shows tentative signs of equity market bottoming with MSCI China up 13% from February lows. Industrial investment is picking up with manufacturing production up 7.0% and exports up 7.1%. Companies are pivoting toward shareholder returns through buybacks and dividends, exemplified by Alibaba's USD 4.9bn buyback in Q1. |
Recovery Industrial Buybacks Manufacturing Exports | |
IndiaIndia maintains a strong structural growth story despite small-cap volatility from regulatory concerns. The market benefits from large domestic investor inflows of USD 50bn annually, reducing volatility but leading to higher valuations. India's weight in MSCI Emerging Markets has grown from 8% to 18% since 2020. |
Growth Small Caps Domestic Valuations Structural | |
BuybacksChinese companies are shifting focus from equity raising to returning capital to shareholders. Alibaba bought back USD 4.9bn in Q1 2024, representing an 11% annualized yield. Smaller Hong Kong-listed names are yielding 10-20% through combined buybacks and dividends, representing a key engagement theme. |
China Shareholder Returns Capital Allocation Hong Kong Yields | |
| 2023 Q4 |
ChinaChina faced significant challenges in 2023 with MSCI China falling 11% due to real estate sector struggles. However, valuations appear attractive with companies like BYD trading at 14x P/E despite becoming the world's largest EV producer. The firm expects government stimulus to stabilize the sector by mid-year and views China as an alpha market opportunity. |
Real Estate Valuations Stimulus Alpha |
Electric VehiclesBYD recently became the largest electric vehicle producer globally, overtaking Tesla, yet trades at significantly lower valuations. BYD has a market cap of $80bn and 2024 P/E of 14x compared to Tesla's $744bn market cap and 62x P/E, highlighting potential value opportunities in the EV space. |
BYD Tesla Valuations Market Cap | |
RatesUS interest rates dominated 2023 narrative, with 10-year treasury yields rising from 3.8% to 5.0% before falling to 3.9%. The market is pricing Fed cuts for H1 2024, which would be positive for emerging markets. High real rates in countries like Mexico and Brazil are expected to fall, supporting outperformance. |
Fed Treasury Emerging Markets Real Rates | |
| 2023 Q3 |
ChinaChina faces persistent structural issues in real estate with unsustainably high property prices and local government dependence on land sales. The central government began taking concrete policy actions including reducing mortgage rates and downpayment ratios. High-value-added exports continue to drive growth with China becoming the world's largest car exporter. |
Real Estate Exports Stimulus Property Manufacturing |
RatesThe Fed's higher for longer stance drove US 10-year treasury yields from 3.8% to 4.6% in Q3, creating significant implications for all asset classes. Rising yields present challenges for emerging market central bankers who want to cut rates but face potential capital outflows and currency weakness. |
Fed Treasury Yields Duration Monetary Policy | |
TurkeyTurkey implemented a 21.5% key rate hike signaling return to orthodox monetary policy. The country experienced an ongoing retail investment boom with the Ebebek IPO seeing 3.9 million retail investors participate, representing 4.5% of the Turkish population. |
Monetary Policy Retail Investment IPO Orthodox Policy | |
| 2023 Q2 |
AIThe quarter was characterized by steep rise in the magnificent seven group of stocks driven by AI hype. US announced tightening of chip export controls to limit China's ability to build and use sophisticated AI. Manager expects AI hype to fade as investors look beyond current market dynamics. |
Artificial Intelligence Chip Wars Technology Semiconductors Export Controls |
ChinaChina fell 10% on deteriorating geopolitics and slowing post-Covid growth. Activity metrics declined with industrial profits falling, manufacturing PMIs below 50, and youth unemployment exceeding 20%. Despite challenges, Chinese firms trade at attractive 11-13x PE with 22-24% earnings growth versus 0% for S&P 500. |
Geopolitics Valuations Economic Growth Stimulus Trade Tensions | |
SolarGlobal solar installation grew 45% in 2022 and expected to grow 43% in 2023, indicating exponential growth needed for energy transition. Solar costs have fallen dramatically, now almost 50% cheaper than coal per MWh. Chinese dominance in renewables value chain remains critical despite China+1 sourcing trends. |
Renewable Energy Cost Reduction Energy Transition Installation Growth Supply Chain | |
IndiaIndia posted 11% return on strong economic data with inflation falling to 4.3% and growth expected to remain above 6%. Digitalization of economy will bring hundreds of millions into formal economy with strong multiplier effects. India benefits from Western support as counterbalance to China, with weight increasing from 8% to 14% in benchmark. |
Economic Growth Digitalization Manufacturing Benchmark Weight Geopolitical Support | |
GreeceGreece rallied 44% year-to-date as New Democracy party won commanding majority, giving strong mandate for pro-business agenda. Main goal is regaining investment grade rating by year-end, already reflected in debt markets with Greek 10-year bonds trading 50bps below Italian debt. IMF expects 2.6% growth versus 0.8% for Eurozone. |
Political Stability Investment Grade Economic Outperformance Debt Markets Pro-Business | |
| 2023 Q1 |
ChinaChina's reopening continued throughout Q1 with all restrictions lifted, though consumer spending is increasing moderately rather than drastically. The regulatory crackdown that began in November 2020 appears to be ending, evidenced by Alibaba's restructuring announcement. China invested $546bn in energy transition in 2022, nearly four times the US amount. |
Reopening Regulatory Growth Energy Transition Valuations |
Energy TransitionChina dominates the renewable energy supply chain globally and invested $546bn in energy transition in 2022. The European Commission proposed Net-Zero Industry Act and Critical Raw Materials Act to reduce reliance on China. East Capital has significant exposure to these sectors in China through their strategies. |
Renewable Energy Supply Chain China Europe Investment | |
RatesFed rate expectations were extremely volatile throughout Q1, with market-implied Fed futures curves changing dramatically each month. Rate expectation movements had huge impacts on markets, particularly banks like Silicon Valley Bank, and drove a relief rally in mega-cap tech names in March. |
Fed Volatility Banking Technology Liquidity |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 8, 2026 | Fund Letters | East Capital | 005930.KS | Samsung Electronics | Consumer Electronics | Semiconductors & Semiconductor Equipment | Bull | Korea Exchange | AI data centers, Earnings upgrades, Free Cash Flow, memory chips, semiconductors, South Korea, technology hardware, valuation | Login |
| Jul 8, 2026 | Fund Letters | East Capital | 000660.KS | SK Hynix | Semiconductors | Semiconductors & Semiconductor Equipment | Bull | Korea Exchange | AI infrastructure, DRAM, hyperscaler capex, memory chips, Pricing power, semiconductors, South Korea, Token consumption | Login |
| Jul 8, 2026 | Fund Letters | East Capital | 009150.KS | Samsung Electro-Mechanics | Electronic Components | Electronic Components | Bull | Korea Exchange | AI value chain, Bottleneck supplier, Component manufacturer, Electronic Components, profit-taking, South Korea, technology hardware | Login |
| Jul 8, 2026 | Fund Letters | East Capital | - | APR | Other | Personal Care Products | Bull | Korea Exchange | Consumer products, Cosmetics, Europe, growth, international expansion, K-Beauty, South Korea, United States | Login |
| Jul 8, 2026 | Fund Letters | East Capital | 021240.KS | Coway | Furnishings, Fixtures & Appliances | Household Appliances | Bull | Korea Exchange | Consumer Discretionary, Home Appliances, Proven growth, Single-digit P/E, South Korea, Value, Water Purification | Login |
| Jul 8, 2026 | Fund Letters | East Capital | - | Guaranty Trust Bank | Other | Banks | Bull | Nigerian Exchange Group | Africa, dividend yield, financial services, Frontier Markets, high ROE, Nigerian banks, Value | Login |
| Jul 8, 2026 | Fund Letters | East Capital | - | Zenith Bank | Other | Banks | Bull | Nigerian Exchange Group | Africa, dividend yield, financial services, Frontier Markets, high ROE, Nigerian banks, Value | Login |
| Apr 13, 2026 | Fund Letters | East Capital | KAP.L | Kazatomprom | Uranium | Uranium & Nuclear Energy | Bull | New York Stock Exchange | Commodities, energy transition, Kazakhstan, Low-cost producer, market leader, Mining, nuclear energy, uranium | Login |
| Jan 15, 2026 | Fund Letters | Jacob Grapengiesser | 000660 KS | SK Hynix Inc. | Information Technology | Semiconductors & Semiconductor Equipment | Bull | New York Stock Exchange | AI, datacenters, DRAM, Memory, Pricingpower | Login |
| Jul 5, 2024 | Fund Letters | East Capital | TSM | Taiwan Semiconductor Manufacturing Company | Information Technology | Semiconductors & Semiconductor Equipment | Bull | NYSE | Advanced Chips, AI, Foundry, growth, NVIDIA, Pricing power, semiconductors, Taiwan | Login |
| Jul 5, 2024 | Fund Letters | East Capital | 1765.HK | China Education Group Holdings | Consumer Discretionary | Diversified Consumer Services | Bull | HKEX | China, contrarian, Education, growth, high dividend yield, Private education, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| 005930.KS | We began the year with an overweight position of 4-5% in Korean memory names, Samsung Electronics and SK Hynix, which we subsequently reduced to around 1%. Hynix and Samsung together will generate almost USD 1 trillion of free cash flow over the next three years, with a current combined market cap of around USD 2.6 trillion, a stark contrast to the US hyperscalers, where free cash flow is falling steeply as they invest in data centres. |
| 000660.KS | We began the year with an overweight position of 4-5% in Korean memory names, Samsung Electronics and SK Hynix, which we subsequently reduced to around 1%. Hynix and Samsung together will generate almost USD 1 trillion of free cash flow over the next three years, with a current combined market cap of around USD 2.6 trillion, a stark contrast to the US hyperscalers, where free cash flow is falling steeply as they invest in data centres. |
| 009150.KS | Five new companies were added to the fund this year, with the largest contributor being Samsung Electro-Mechanics (SEMCO). This component manufacturer returned 646% to the fund in 1H 2026. Towards the end of the quarter, we took profits in this name as we felt that the valuations looked quite stretched, even when taking into account our fairly bullish earnings expectations. At its peak, SEMCO represented just over 4% of the portfolio, but it currently accounts for only around 0.6%. |
| 021240.KS | We also added Coway, a water purification company with a proven track record of growth, which is currently trading at single-digit P/E multiples. |
| MU | Micron's results and guidance, published just before the quarter end, indicate that the market continues to underestimate the substantial pricing power of component and semiconductor manufacturers. |
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|---|---|---|---|---|---|
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