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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Pangolin Asia Fund 2023 Q2 Investor Letter | Buyside Digest

Back to Fund Profile (Pangolin Asia Fund)

Primary Source Intelligence • Q2 2023 Letter Analysis

Pangolin Asia Fund Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Pangolin Asia Fund. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

YTD+9.16%

Annualized+10.05%

Positioning StanceConstructive

GeographyAsia

Digest Analysis

Quick Take

"Maintaining concentrated exposure to undervalued Malaysian and Indonesian equities. The manager emphasizes ESG compliance, particularly labor rights, as a key investment consideration."

Executive Summary

The Pangolin Asia Fund delivered a 1.90% return in June 2023, bringing YTD performance to 9.16% despite significant currency headwinds. The fund maintains a concentrated portfolio with 98% invested across Singapore (5%), Malaysia (28%), and Indonesia (67%). The manager extensively discusses labor rights issues in Malaysia, emphasizing the importance of ESG compliance, particularly the social aspect. The fund owns a furniture manufacturer that has invested in proper worker accommodation to meet international standards. Despite the Malaysian Ringgit falling from 3.80 to 4.67 against the USD since inception and the Indonesian Rupiah declining from 9,000 to 15,131, the fund has achieved annualized USD returns of 10%. Portfolio valuations remain attractive at 10.4x 2023F P/E with strong fundamentals including 21% ROE and 39% ROIC. The manager believes continued focus on significantly undervalued stocks will enable the fund to prevail against ongoing USD strength.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

65%

CautiousHigh

Moderate (65%)

The manager demonstrates moderate-high conviction through concentrated geographic positioning (98% invested in just three countries) and willingness to deploy new capital. However, the absence of named individual positions and the hedged language around currency challenges prevents a higher score.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The manager expresses cautious optimism about the opportunity set, noting that investments remain significantly undervalued. However, the outlook is tempered by ongoing currency challenges and the need for selectivity in ESG-compliant investments.

Risk Appetite

50%

DefensiveAggressive

Balanced (50%)

The fund maintains high exposure at 98% invested with concentrated geographic positioning. The manager is actively deploying new subscriptions into a new position, indicating continued risk appetite despite currency headwinds.

Capital Deployment

30%

De-riskingDeploying

De-risking (30%)

The fund is deploying new subscriptions into a new position, indicating active capital deployment. However, the overall exposure remains stable at 98%, suggesting modest rather than aggressive deployment activity.

Forward Guidance

25%

CautiousExpansionary

Cautious (25%)

The manager expresses hope that strong performance can continue but acknowledges the ongoing challenge of USD strength. The tone is cautiously optimistic rather than aggressively bullish about future deployment.

Language Signal

BearishBullish

Bearish (0%)

The letter balances positive language about undervalued opportunities and strong fundamentals with concerns about currency headwinds and ESG compliance challenges. The extensive discussion of labor rights issues adds a cautionary tone.

Perceived Risk

45%

Low RiskElevated

Moderate Risk (45%)

The manager acknowledges currency risk as an ongoing challenge and discusses ESG compliance risks in detail. However, these are presented as manageable challenges rather than systemic threats to the investment thesis.

Opportunity Density

60%

ScarceAbundant

Selective (60%)

The manager sees selective opportunities, noting that investments remain significantly undervalued. The deployment of new capital into a new position suggests adequate opportunity availability, though the focus on ESG compliance adds selectivity constraints.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

The manager demonstrates a long-term perspective, referencing the fund's 18-year track record and expressing willingness to hold through currency volatility. The focus on fundamental value creation over currency movements indicates a multi-year investment horizon.