Fund Profile


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Asia Dragon Trust (LON:DGN) is one of the largest and oldest investment trusts in the Asia sector. It is run by two co-managers, Adrian Lim and Pruksa Iamthongthong, who are bottom-up fundamental stock pickers. They look to build a portfolio of world-class quality companies based in the Asian region, to be held for the long term. The quality characteristics they look for include sustainable business models, robust finances and being driven by structural growth themes. These may lead to some sector biases, though the managers will otherwise look to keep a diversified range of exposures (see Portfolio).

The past year has been challenging for the trust, with the zero weight in traditional energy names affecting the trust’s relative performance, which the managers’ strong stock-selection skills were unable to offset. However, the long-term performance of the trust remains notably ahead of the benchmark (see Performance).

The managers tightened the portfolio in 2022 by adding conviction to their higher quality names, which they believe should be in a better place to manage an economic slowdown. More recently, they have selectively taken advantage of valuation opportunities, such as in the Chinese internet names, which have been sold off over regulatory crackdowns and which they now believe to be cheap. These have since been supported by the reopening trade in China as the country reverses its zero-covid policy.

The managers argue that Asia may be less impacted by a global recession due to the positive impact of China’s reopening and less aggressive central bank policies, which may begin to restore investor confidence in the region.

Analyst's View

The past year has been a rare period of underperformance versus the benchmark for DGN. We understand that much of this has come as a result of stock-specific issues, though there have been broader factors that have affected the short-term returns of the trust (see Performance). Having a zero weight to energy has been painful, but we believe Adrian and Pruksa’s alternative exposure to the likes of renewable energy has a longer-term growth trajectory that should support investors as the energy situation settles. The headwinds that Asia is facing are, arguably, receding; China seems to have reversed its zero-covid policy and we believe this could provide upside for the region, not least in terms of sentiment.

The managers’ approach of identifying quality companies should help the portfolio’s resilience and enable it to protect against economic difficulties and it could, therefore, be well-placed to capture this upside when it happens. The increase in concentration of the portfolio’s top ten holdings demonstrates the managers’ commitment to this, making it the most concentrated trust of the peer group, and we think should provide confidence to investors (see Portfolio).

The trust runs a structural Gearing level which should enable it to outperform should markets come back strongly. Even in the event this takes longer than hoped, the core approach should offer defensiveness in the meantime, with the ability to capitalise on valuations as they weaken.


  • Focus on quality companies which tend to outperform in weak markets
  • Most concentrated top ten in peer group demonstrating managers’ conviction
  • Reopening of China could provide a boost to the region


  • Difficult market conditions could extend further into 2023
  • Trust has underperformed peers and benchmark over the past year
  • Gearing can amplify losses as well as gains
Continue to Portfolio

Fund History

20 Nov 2023 Fund Analysis
DGN’s combination offers numerous advantages, as well as being on a substantial discount…
25 Oct 2023 We’re going to need a bigger boat...
We argue corporate activity is picking up, making the investment trust sector an exciting place to invest…
26 Jul 2023 Our board and saviour
Boards are proving their value as discounts languish…
30 Jun 2023 High end China
Several managers are investing in higher-end consumer growth in the world’s second-largest economy…
15 Feb 2023 Fund Analysis
DGN hopes to capitalise on a recovery in sentiment towards Asia...
25 Jan 2023 The toad to recovery
Two of our analysts debate the outlook for China in 2023…
06 Apr 2022 Fund Analysis
DGN offers core exposure to a fast-growing region…
25 Mar 2022 Slides and Audio: Asia Dragon
Download the presentation and listen to the audio from our 'Ideas for your ISA' virtual Spring event on 16 March...
23 Mar 2022 Fifteen ideas for your ISA
Slides and audio from our event last week, featuring fund managers running money in every major market in the world...
08 Dec 2021 We are the (ESG) champions
Investment trusts tend to be amongst the best-performing ESG strategies in the combined open- and closed-ended universe…
09 Sep 2021 Fund Analysis
DGN offers core exposure to high quality Asian companies and trades on a wide discount…
25 Aug 2021 Is the UK’s debt a ticking time bomb?
Our analyst argues Rishi is right to worry about government debt and borrowing…
31 Mar 2021 East End boys and West End girls
Our analysts debate whether the US or Asian stock markets will deliver the best returns over the next decade…
24 Feb 2021 Fund Analysis
DGN has returned to form with strong five-year performance despite extremely volatile markets…
08 Sep 2020 Fund Analysis
DGN’s focus on quality could prove attractive if the economic situation in Asia deteriorates…
26 Aug 2020 Trump v. Biden
Two of our analysts debate who will win the US election and what that means for markets…
05 Mar 2020 Don't panic: the case for investing in Asia this ISA season
We examine the relationship between stock market and GDP growth, before debating the case for an allocation to Asia...
13 Feb 2020 Fund Analysis
DGN has been performing strongly thanks to good stock-picking…
28 Aug 2019 Quality street: can the dominant style continue to outperform?
For several years, quality as an investing style has dominated, outperforming both value and growth. We examine why the case for quality remains strong and the importance of taking an active approach…
12 Aug 2019 Fund Analysis
This Asia focused trust remains on a far wider discount than its peers despite a marked improvement in performance...
10 Oct 2018 Information overload
Our analysis shows the long term case for emerging markets remains largely unaffected by much of the negative newsflow surrounding the sector...
01 Oct 2018 Fund Analysis
This Asia Pacific ex Japan trust has undergone a significant transformation in recent years, with exposure to technology and China reflecting a new tilt towards quality...
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