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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"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."
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.
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