After making several mistakes some years ago, the management team of the Edinburgh Dragon investment trust, led by Singapore-based Adrian Lim, is back on track.

Over the past six months, the fund has recorded total returns of 41 per cent, in the process beating most rivals investing in the same region, according to an article in «This is Money».

Though the trust is headed by Adrian Lim, he is part of a big Asian investment team at Aberdeen Asset Management. More than 70 per cent of the 83 billion pounds of equity assets that Aberdeen manages worldwide are listed either in Asia Pacific or emerging markets, the report states further.

Bias Towards Financials

Malaysia-born Lim says the fund has suffered in the past on several fronts – either holding positions in companies that have had to go through painful reorganisation, hitting their shares (Standard Chartered, for example), or ignoring stocks that have gone on to perform well, such as Chinese internet group Tencent, where Lim was not happy about its legal structure.

It also made the mistake of reducing its exposure to Chinese equities too early, missing out on gains before the market tumbled over fears that the country’s growth bubble had burst. Today, Dragon is invested across 60 stocks with a bias towards financial institutions. This compares with 50 three years ago.

Some Bold Moves

The diversification has allowed Lim to make some bold moves. «We’ve used the increase in holdings to invest in some frontier market ideas,» Lim says. These include Vietnam Dairy Products, which Lim says has a «strong market position» in Vietnam as a result of a good distribution network and sound logistics.

Another bold addition to the fund is Yoma Strategic Holdings, a property developer with shares listed in Singapore but investing heavily in the burgeoning economy of Myanmar (Burma).
«The country is making the painful transition to democracy,» Lim said to «This is Money». «It’s work in progress but there are lots of opportunities investors can benefit from.»

Asia – a Sound Footing

Lim believes Asia remains on a «sound footing», though he admits there are a number of «unknowns» that could upset the apple cart, including the course of interest rates, the dollar and the pace of economic recovery in China.