‘Fierce competition not necessarily good for EV investors’ - Barkhordar

Barkhordar says this is ‘because margins will be squeezed and this is likely to lead to a fall in profits’. He also discusses AI and China investment themes with IGTV’s Angeline Ong.

(Partial Video Transcript)

Discussing AI and Asian investment themes

Angeline Ong: Hello and welcome to IG’s “Trading the markets”. I'm Angeline Ong, and today we're joined by a very special guest, Abbas Barkhordar, co-manager of the Schroder Asia Pacific Fund. Abbas, thank you so much for joining us. I know that you often go to the region and you're in close contact with the analysts there as well. Asia Pacific, huge growth there. What are the themes you are looking at this year that give your clients the biggest potential for returns?

Abbas Barkhordar: Thank you Angeline. Absolutely. You're right. There's lots and lots of opportunities in Asia. We are finding at the moment that there are more opportunities. As you know, the markets have been fairly weak, actually, certainly relative to more developed markets over the last couple of years. So actually, relative valuations do look quite attractive in the region. One of the things we do like and we have liked for a long time, it's a fund with quite a long investment horizon... We tend to look at these sort of longer term themes that that drive companies growth for the for the medium term. And one area where we're seeing opportunities at the moment that ticks those boxes is in the IT space and semiconductors in particular.

This is a theme that I think, you know, most of your viewers will have followed and possibly be more familiar with. The household names that are based in the US, clearly AI has been a big talking point for all markets globally. But actually in Asia, where we see a lot of the manufacturing base of these semiconductors, is the key beneficiary for the region. Names such as TSMC that you may have heard of and then lots of other ones which are in the supply chain in countries such as Taiwan and Korea, which stand to benefit from the growth in semiconductor demand. At the moment obviously AI is driving that.

But we also know that there's lots more digitisation going on in all sorts of industries, greater communication, 5G and all of those things to drive much greater growth and profitability for some of the companies based in Asia in that semiconductor supply chain. So that's one area that we're seeing a lot of opportunities.

(Watch the video for the full interview)