Article
ArticleAsian smaller companies and the age of “sustainable superabundance”
Xin-Yao Ng, Co-Manager of Aberdeen Asia Focus, explores how investing across Asia’s smaller companies can offer exposure to a broader range of growth drivers and support sensible diversification.
Author
Xin-Yao Ng
Investment Manager, Aberdeen Asia Focus PLC
Duration: 5 Mins
Date: 05 Oct 2026
According to Elon Musk, we’re on the cusp of utopia. This might seem hard to believe, given the general state of the world, but that’s how the first trillionaire in history sees things panning out.
Musk’s vision is firmly rooted in the all-encompassing reach of artificial intelligence (AI) and robotics. Together, he says, these two fields will produce a future in which work is essentially a hobby, money is nigh on meaningless and everyone is able to bask in an era of “sustainable superabundance”.
Sounds great to me. Frankly, I could do with a rest. And it seems we won’t have to wait too long before this age of endless repose dawns: Musk has suggested the transformation could be evident within a decade.
As investors, how might we approach this milestone? If AI and robotics are the foundations of the life of leisure awaiting us all, as Musk proposes, then logic pretty much dictates we should plough everything we have into those two arenas.
For a fund like ours, which specialises in Asian equities, this ought to be exciting news. By any standard, Asia is an acknowledged leader in both spheres.
We have three of the biggest chipmakers – Taiwan’s TSMC and South Korea’s Samsung Electronics and SK Hynix. We have China’s high-profile commitment to pushing the frontiers of robotics, as recently demonstrated anew by a Usain-Bolt-beating humanoid sprinter.
So why bother to look any further? Why not just back the established titans and rake in the returns until technology reaches is blissfully capable of catering to our every whim?
Sadly, this is where Musk’s tech-enabled Shangri-La starts to wilt under closer scrutiny. It’s also where investors should grasp the perils of portfolios that rely on just one or two sectors, industries, markets, themes or ideas.
Perhaps the first point we ought to note is that the long-term appeal of successfully investing in anything is debatable if the endgame is a world where we don’t need to work, spend or worry. It would be interesting to hear precisely how the richest man on the planet thinks this paradox might be resolved.
More practically, an excessive focus on a tiny number of stocks has seldom proved to be particularly farsighted. The aforementioned trio of Asian chipmakers served up a striking illustration only a couple of months ago.
TSMC accounts for around 45% of Taiwan’s Taiex index, while Samsung Electronics and SK Hynix comprise more than half of South Korea’s Kospi index . Such weightings can be more than agreeable when the picture is rosy, but they can be extremely unhelpful when the picture suddenly turns bleak.
This is what happened at the end of July, when renewed concerns over the durability of the AI revolution sent both indexes plummeting. Passive investors with sizeable exposures to these stocks suffered a notably hefty hit.
Of course, there’s a lot to be said for investing in businesses that are driving change on a monumental scale – regardless of whether the transformation eventually turns out to be as dramatic as Musk envisages. These are trillion-dollar companies for a reason.
But the fact is that there are still many other engines of growth. And the explanation for that is eminently straightforward: the list of things that people actually need isn’t confined to semiconductors and record-shattering androids.
This is why we invest in Asia’s smaller companies. Many of our holdings are directly or indirectly linked to AI and/or robotics, but many others recognise that the cutting edge of technology isn’t yet the be-all and end-all – and that, in all probability, it never will be.
It might be worth remembering at this stage that Musk is far from the only supremely clever soul to contemplate a future in which progress could translate into glorious inactivity. Bertrand Russell, for example, touched on the matter more than 90 years ago – and he came to a rather different conclusion.
In In Praise of Idleness, originally published in 1935, Russell argued that industrial production was already sufficient to meet humanity’s needs. Yet he observed how innovations touted as a means of reducing levels of labour almost invariably instead preserved or even raised them.
Email, laptops and smartphones have all maintained this trend during our own lifetimes. Who can truly say whether AI and robotics will genuinely flip the narrative? Maybe I won’t get that rest after all.
The bottom line is that no-one – not even the man who gave us Tesla and SpaceX – knows what lies ahead. That’s why it’s usually prudent for investors to cover more than one possibility.
Ultimately, it’s a question of sensible diversification. Feel free to invest in mega-cap tech behemoths – they undoubtedly have their attractions – but understand the potentially significant merits of casting the net more widely, both in Asia and elsewhere.
Musk’s vision is firmly rooted in the all-encompassing reach of artificial intelligence (AI) and robotics. Together, he says, these two fields will produce a future in which work is essentially a hobby, money is nigh on meaningless and everyone is able to bask in an era of “sustainable superabundance”.
Sounds great to me. Frankly, I could do with a rest. And it seems we won’t have to wait too long before this age of endless repose dawns: Musk has suggested the transformation could be evident within a decade.
As investors, how might we approach this milestone? If AI and robotics are the foundations of the life of leisure awaiting us all, as Musk proposes, then logic pretty much dictates we should plough everything we have into those two arenas.
For a fund like ours, which specialises in Asian equities, this ought to be exciting news. By any standard, Asia is an acknowledged leader in both spheres.
We have three of the biggest chipmakers – Taiwan’s TSMC and South Korea’s Samsung Electronics and SK Hynix. We have China’s high-profile commitment to pushing the frontiers of robotics, as recently demonstrated anew by a Usain-Bolt-beating humanoid sprinter.
So why bother to look any further? Why not just back the established titans and rake in the returns until technology reaches is blissfully capable of catering to our every whim?
Sadly, this is where Musk’s tech-enabled Shangri-La starts to wilt under closer scrutiny. It’s also where investors should grasp the perils of portfolios that rely on just one or two sectors, industries, markets, themes or ideas.
Perhaps the first point we ought to note is that the long-term appeal of successfully investing in anything is debatable if the endgame is a world where we don’t need to work, spend or worry. It would be interesting to hear precisely how the richest man on the planet thinks this paradox might be resolved.
More practically, an excessive focus on a tiny number of stocks has seldom proved to be particularly farsighted. The aforementioned trio of Asian chipmakers served up a striking illustration only a couple of months ago.
TSMC accounts for around 45% of Taiwan’s Taiex index, while Samsung Electronics and SK Hynix comprise more than half of South Korea’s Kospi index . Such weightings can be more than agreeable when the picture is rosy, but they can be extremely unhelpful when the picture suddenly turns bleak.
This is what happened at the end of July, when renewed concerns over the durability of the AI revolution sent both indexes plummeting. Passive investors with sizeable exposures to these stocks suffered a notably hefty hit.
Of course, there’s a lot to be said for investing in businesses that are driving change on a monumental scale – regardless of whether the transformation eventually turns out to be as dramatic as Musk envisages. These are trillion-dollar companies for a reason.
But the fact is that there are still many other engines of growth. And the explanation for that is eminently straightforward: the list of things that people actually need isn’t confined to semiconductors and record-shattering androids.
This is why we invest in Asia’s smaller companies. Many of our holdings are directly or indirectly linked to AI and/or robotics, but many others recognise that the cutting edge of technology isn’t yet the be-all and end-all – and that, in all probability, it never will be.
It might be worth remembering at this stage that Musk is far from the only supremely clever soul to contemplate a future in which progress could translate into glorious inactivity. Bertrand Russell, for example, touched on the matter more than 90 years ago – and he came to a rather different conclusion.
In In Praise of Idleness, originally published in 1935, Russell argued that industrial production was already sufficient to meet humanity’s needs. Yet he observed how innovations touted as a means of reducing levels of labour almost invariably instead preserved or even raised them.
Email, laptops and smartphones have all maintained this trend during our own lifetimes. Who can truly say whether AI and robotics will genuinely flip the narrative? Maybe I won’t get that rest after all.
The bottom line is that no-one – not even the man who gave us Tesla and SpaceX – knows what lies ahead. That’s why it’s usually prudent for investors to cover more than one possibility.
Ultimately, it’s a question of sensible diversification. Feel free to invest in mega-cap tech behemoths – they undoubtedly have their attractions – but understand the potentially significant merits of casting the net more widely, both in Asia and elsewhere.
Companies selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance.
Important information
Risk factors you should consider prior to investing:
- The value of investments, and the income from them, can go down as well as up and investors may get back less than the amount invested.
- Past performance is not a guide to future results.
Other important information:
Issued by abrdn Fund Managers Limited, registered in England and Wales (740118) at 280 Bishopsgate, London EC2M 4AG. The company is authorised and regulated by the Financial Conduct Authority in the UK.
Find out more at aberdeeninvestments.com/aas or by registering for updates. You can also follow us on Facebook and LinkedIn.
Issued by abrdn Fund Managers Limited, registered in England and Wales (740118) at 280 Bishopsgate, London EC2M 4AG. The company is authorised and regulated by the Financial Conduct Authority in the UK.
Find out more at aberdeeninvestments.com/aas or by registering for updates. You can also follow us on Facebook and LinkedIn.
