Artificial intelligence, humanoid robots and gold drive Asian markets

Artificial intelligence remains an important export driver in Taiwan and South Korea, but other manufacturing segments are showing signs of weakness.

by Marcel Zimmermann, manager of the Lemanik Asian Opportunity fund at Lemanik

Over the course of the month, regional geographic performance in Asia was positive in South Korea, Hong Kong/China and Taiwan, while Japan and Southeast Asia underperformed the regional index. Performance across regional sectors was once again shaped by strong interest in artificial intelligence and the resources segment, which benefited from the continued rise in the prices of gold and silver.

The economic outlook in Asia remained relatively mixed. Purchasing managers' indices in the region continue to fluctuate around 50, pointing to limited growth potential. Artificial intelligence remains an important export driver in Taiwan and South Korea, but other manufacturing segments are showing signs of weakness. The uneven trade policy of the United States continues to limit the long-term visibility needed for major capital investment plans.

Indonesia cut its benchmark rate by 0.25% to 4.75% to support the economy. The Asian Development Bank lowered growth forecasts for developing Asian countries to 4.8% in 2025 (-0.1) and 4.5% in 2026 (-0.2%) because of the impact of U.S. tariffs. However, domestic demand continues to support relatively strong GDP growth. We expect artificial intelligence, humanoid robots and metals to remain the main investment themes. However, valuations are becoming more stretched, and we are looking at other segments of the economy that should benefit from this major investment flow.

Our funds in the institutional share classes reached a new all-time high during the month, but underperformed the index in the last week due to heavy profit-taking in the artificial intelligence and resources segment. Year to date, our fund classes are up +18.58% and +17.40%, outperforming the benchmark by 10.09% for the institutional class and 8.91% for the retail class. The weakening of the South Korean won and the Indonesian rupiah, together with the flat performance of the fund's equity holdings, further weighed on results. During the month we made slight changes to the fund's investments. Exposure to Thailand was further reduced, but we maintain an overweight position in the Southeast Asian region. We partially took profits in Hong Kong and Japan, but increased regional exposure to the robots and artificial intelligence segment. Regional valuations continue to be lower than those in the United States and Europe.