Fund Selectors Favor Active Asian Equity Strategies
As of October 15, 2026, professional investors are moving toward active management to navigate high market concentration.
Updated on Oct. 15, 2026 in Investing
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Data from October 15, 2026, shows that 98% of surveyed UK financial professionals prefer active Asian equity funds over passive options. This shift is driven by a desire to avoid the risks associated with the high technology sector concentration found in major regional indices.
Why it matters
Passive indices often feature heavy weighting in individual companies like TSMC, Samsung Electronics, and SK Hynix, which creates risk for investors. Active management allows selectors to diversify beyond these specific holdings to capture broader growth.
South Korea and Taiwan account for nearly half of the MSCI AC Asia Pacific ex-Japan Index, while three major tech firms hold a one-third index weight. Approximately 12% of surveyed selectors anticipate a dramatic rise in active fund allocations.
The players
MSCI AC Asia Pacific ex-Japan Index
This is a primary equity index that tracks stocks in developed and emerging Asian markets, excluding Japan.
TSMC
Taiwan Semiconductor Manufacturing Company is a global leader in the semiconductor industry and a key component of major Asian market indices.
Samsung Electronics
This South Korean conglomerate is a major multinational tech company that holds significant weight in regional equity indices.
SK Hynix
This is a major South Korean memory semiconductor supplier that significantly influences the performance of Asian regional indices.
The details
Many regional indices are currently driven by price momentum and heavy concentration in limited technology sectors. Active management facilitates investment in companies outside these index giants, potentially offering better risk-adjusted returns for investors.
Timeline
October 15, 2026: The date marking the analysis of fund selector sentiment.
Next three years: The projected timeframe for anticipated increases in high-conviction active allocations.
Market Dynamics
The reliance on index-heavy tech stocks follows a pattern set by the historical price-momentum-driven performance of the MSCI AC Asia Pacific ex-Japan Index. This shift toward active management marks a departure from the strategy of relying on passive tracking to capture regional growth.
Retail investors may see a shift in portfolio composition as fund managers move away from index-heavy tech concentrations. This change could lead to different risk-adjusted return profiles for those invested in regional Asian equity products.
The takeaway
Concentrated indices can leave investors vulnerable to the performance of just a few companies in the technology sector. Active managers are increasingly turning away from this model to seek more balanced risk-adjusted returns across the Asian market.
Further reading
Learn more about the differences between active and passive strategies in our guide to Investing.
Source note: This article includes information reported by Funds Europe.
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