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Fund Profile


This is a non-independent marketing communication commissioned by abrdn. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

DGN’s combination offers numerous advantages, as well as being on a substantial discount…

Asia Dragon (DGN) owns a portfolio of world-class, quality companies from across the Asian region. The trust, managed by Pruksa Iamthongthong and James Thom, is soon to complete a proposed combination with abrdn New Dawn (ABD) which will result in a higher asset base, leading to lower fees and potentially improved liquidity. Furthermore, the new investment policy will have an allocation to Australasia as part of the allowance of up to 30% in non-benchmark positions, which is intended to improve diversification and allow for alpha-generation opportunities (see Portfolio). James has joined DGN as co-manager following the retirement of Adrian Lim and will complement Pruksa’s existing specialisms with his background in Indian and South East Asian companies (see Management).

Performance over the long term is in line with the benchmark despite the managers facing strong headwinds in the past 18 months as a result of their quality focus. Instead the market has been driven by value companies and macro factors. However, the managers believe that their companies’ superior earnings growth will soon be rewarded by markets, when investors begin to focus on fundamentals again. The managers’ overweight to technology firms, particularly in the semiconductor industry, is held in part to capture the improved demand as a result of the proliferation of artificial intelligence (AI ).

The shares of DGN have fallen to a wide Discount in 2023. The current level is over one standard deviation wider than the five-year average and wider than the peer group, despite the board’s attempts to narrow this through share buybacks.

Analyst's View

In our opinion, abrdn have taken a very positive step for shareholders by combining ABD into DGN, which will leave the destination trust with a large asset base, helping to lower costs, improve liquidity and increase the trust’s profile, as DGN may be large enough to be included in the FTSE 250 (see Portfolio). We believe that by also lowering the charging structure the trust will be a highly competitive offering in the Asian equities space (see Charges). Furthermore, the ability to now invest in Australasia, an off-benchmark position, provides more opportunities for the managers to access sectors that aren’t as well represented in the benchmark, such as resources and healthcare, which may offer alpha-generation opportunities.

We believe DGN’s Discount may also provide an attractive entry point for long-term investors at present. The level has widened to over one standard deviation wider than the five-year average, which arguably offers an additional opportunity to generate share price returns, on top of the long-term capabilities of the managers. Over the long term, the managers have shown their ability to outperform the market as a result of their quality focus, which they believe leaves them well placed to capture a potential earnings bounce in Asia if fundamentals improve in 2024 (see Performance). They have pointed to a number of potential catalysts for this, from an improvement in the Chinese consumer , to a surge in AI-related semiconductor demand which we believe offers the trust numerous opportunities to benefit from a recovery.


  • DGN is trading at a wide discount which could prove an attractive entry point
  • Combination with ABD set to improve liquidity, reduce fees and increase diversification
  • Quality focus could be well placed to capture a fundamental-focussed rally


  • Potential for increased turnover from combination
  • Larger AUM post-combination may limit flexibility
  • Relatively new management team, albeit with experience in the sector
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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