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| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
The Pangolin Asia Fund declined 1.04% in June and is down 4.60% year-to-date, with the portfolio 98% invested across Singapore (7%), Malaysia (40%), Indonesia (49%), and Philippines (4%). The manager is actively deploying into Indonesian market weakness, believing headline fears around MSCI's potential downgrade to Frontier status are creating opportunities for long-term investors. The fund's holdings have outperformed the broader market decline, suggesting others recognize the value. The letter provides extensive analysis of MSCI-based ETFs, demonstrating that passive strategies in Indonesia have been unprofitable since 2010 while the fund has significantly outperformed through bottom-up stock selection. Allianz Malaysia, one of the largest positions, exemplifies the approach: the country's leading general insurer with an 88% combined ratio, trading at 7.6x forward PE despite delivering 16.8% annualized returns since 2020. The manager estimates the portfolio will generate a 30% free cash flow yield by 2030, with local broker price targets for Indonesian holdings averaging 82% above current levels. Political uncertainty in Malaysia and regulatory pressures in Indonesia are acknowledged but viewed as temporary headwinds for fundamentally sound businesses purchased at compelling valuations.
The fund invests in undervalued, cash-generative businesses across ASEAN markets that are overlooked by passive ETF strategies and index-hugging managers, with particular focus on Indonesia and Malaysia where bottom-up stock selection can identify quality companies trading at substantial discounts to intrinsic value.
Manager remains constructive on ASEAN markets despite near-term headwinds, emphasizing that consumption growth in Asia continues to outpace most of the world even as this is not yet reflected in valuations. Views current market weakness, particularly in Indonesia, as providing attractive entry points for patient capital. Believes the fund's focus on free cash flow generation and long-term compounding will drive returns as holdings trade at 8.9x forward PE with 20% ROIC and estimated 30% free cash flow yield by 2030. Political uncertainties in Malaysia and regulatory pressures in Indonesia are acknowledged but not seen as altering the fundamental investment case for high-quality businesses purchased at compelling valuations.
As of Jul 8, 2026
James Hay founded Pangolin Asia Fund in December 2004 and has been involved with Asian financial markets since 1986. He has managed his own investment portfolio since 1998, managing the Fund in a similar style to his private investments. The management team includes Vinchel Budihardjo serving as CEO, Gerald Ambrose as director with sixteen years of experience in Asian equity sales specializing in small and medium-sized companies within ASEAN and previously served as a submariner in the Royal Navy during the Falklands War, and Fiona Somerville as director who formerly managed Asia ex-Japan markets with Invesco MIM Asset Management and now operates her own financial headhunting company based in Switzerland. Management owns 8% of the fund, demonstrating significant alignment with investors.
Our investment style is based on fundamental analysis, for which we believe there is no substitute. Pangolin Asia Fund is a long-term value fund with a primary focus on South East Asia. The Fund invests primarily in listed securities of companies which, in the view of the Investment Manager, are trading below their true and realisable value. Stock selection is based on a bottom-up approach and is supported by fundamental research and company visits. The Investment Manager places a high emphasis on management quality, cash-flow, pricing power, returns on equity and capital, earnings history and the treatment of minorities. The typical investment horizon is 3-5 years although it may be sold earlier if an investment appreciates within that time period to its perceived value. The fund seeks absolute returns rather than to perform in relation to any benchmark equity index and adopts a value-driven, bottom-up approach with at least a three year view.
Lead Portfolio Manager
James Hay
Managing Partner
Moderate Conviction Bullish
Market Conviction
High-conviction positioning: Pangolin Asia Fund is deploying into ASEAN market weakness, particularly Indonesia, where MSCI downgrade fears have created compelling entry points. The portfolio trades at 8.9x fo...
Growth Outlook
Market outlook remains moderate conviction: Pangolin Asia Fund is deploying into ASEAN market weakness, particularly Indonesia, where MSCI downgrade fears have created compelling entry points. The portfolio trades at 8.9x fo...
Risk Appetite
Risk appetite posture is above average conviction: Pangolin Asia Fund is deploying into ASEAN market weakness, particularly Indonesia, where MSCI downgrade fears have created compelling entry points. The portfolio trades at 8.9x fo...
Capital Deployment
Manager actively deployed capital into high-conviction opportunities. Pangolin Asia Fund is deploying into ASEAN market weakness, particularly Indonesia, where MSCI downgrade fears have created compelling entry points. The portfolio trades at 8.9x fo...
Forward Guidance
Forward guidance signal: Pangolin Asia Fund is deploying into ASEAN market weakness, particularly Indonesia, where MSCI downgrade fears have created compelling entry points. The portfolio trades at 8.9x fo...
Language Signal
Tone analysis indicates moderate conviction language: Pangolin Asia Fund is deploying into ASEAN market weakness, particularly Indonesia, where MSCI downgrade fears have created compelling entry points. The portfolio trades at 8.9x fo...
Perceived Risk
Perceived risk level is evaluated as moderate conviction. Pangolin Asia Fund is deploying into ASEAN market weakness, particularly Indonesia, where MSCI downgrade fears have created compelling entry points. The portfolio trades at 8.9x fo...
Opportunity Density
Opportunity density index indicates moderate conviction actionable entry points. Pangolin Asia Fund is deploying into ASEAN market weakness, particularly Indonesia, where MSCI downgrade fears have created compelling entry points. The portfolio trades at 8.9x fo...
Time Horizon
Investment time horizon reflects a moderate conviction orientation. Pangolin Asia Fund is deploying into ASEAN market weakness, particularly Indonesia, where MSCI downgrade fears have created compelling entry points. The portfolio trades at 8.9x fo...
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