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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Pangolin Asia Fund delivered 10% year-to-date returns by investing in undervalued ASEAN companies with net cash balance sheets. The fund is 65% invested in Indonesia, benefiting from lack of global investor interest despite 5% GDP growth and rising consumer spending."
Pangolin Asia Fund returned 2.03% in March and 10% year-to-date, significantly outperforming regional indices. The fund is 99% invested with 65% in Indonesia, 30% in Malaysia, and 5% in Singapore. Manager James argues that ASEAN markets remain absurdly cheap despite GDP growing at 5% annually, with the ASEAN index falling 27% over the past decade while economies and corporate profits have grown. The portfolio consists of companies with net cash on balance sheets. The fund benefits from lack of investor interest in the region, providing time to assess opportunities without competition. Analysis of luxury goods consumption shows Asian consumers increasingly spending on high-end products, with Hermès APAC sales rising 13% since 2015. Goldman Sachs projects Indonesia will become the world's fourth largest economy by 2050. The manager holds minimal cash given attractive valuations and potential banking system risks, positioning for continued outperformance as markets remain out of favor.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High conviction evidenced by 99% invested portfolio with concentrated geographic exposure (65% Indonesia). Manager provides specific thesis around ASEAN growth, names concrete catalysts like Indonesia becoming 4th largest economy, and shows willingness to hold through volatility. However, no individual position names or sizing disclosed, which caps conviction below 0.75.
Growth Outlook
Manager is constructive on ASEAN markets citing strong GDP growth and cheap valuations, but acknowledges markets remain out of favor and there are concerns about potential banking system collapse. The outlook is cautiously positive rather than strongly bullish.
Risk Appetite
Fund is 99% invested with very little cash, showing high risk appetite. Manager is actively deploying capital into what he sees as cheap opportunities and positioning for potential banking system risks by avoiding cash.
Capital Deployment
Fund is 99% invested with minimal cash, but activity was limited to reinvesting dividends and small fund inflows. No evidence of significant new cash deployment or major position changes. This represents maintenance of high exposure rather than active deployment.
Forward Guidance
Manager expects markets to remain out of favor for a while but sees this as beneficial for finding opportunities. There's selective optimism about continued outperformance but no aggressive deployment bias expressed.
Language Signal
Language includes positive terms like 'cheap', 'attractive', 'opportunity' and 'beauty' of the situation, but also mentions risks like banking system collapse and markets being out of favor. Slightly more positive than negative overall.
Perceived Risk
Manager acknowledges potential banking system collapse risk and notes that US foundations are not interested in the region. However, these risks are mentioned briefly and not central to the letter's discussion. Most content focuses on opportunities rather than risks.
Opportunity Density
Manager explicitly states there is 'so much that is so cheap' in their markets and emphasizes the luxury of time when assessing companies due to lack of competition. This indicates a rich opportunity set in the manager's view.
Time Horizon
Manager discusses multi-year themes like Indonesia becoming 4th largest economy by 2050 and generational wealth shifts. The emphasis on having 'luxury of time' when assessing companies and 18-year track record suggests a patient, multi-year investment approach.
