Ashoka WhiteOak Emerging Markets Trust Achieves 24.49% Q2 2026 Return, Surpassing Benchmark by 1.24%

Q2 2026 Performance Overview: Semiconductor Sector Fuels Outperformance

Ashoka WhiteOak Emerging Markets Trust plc achieved a 24.49% return in Q2 2026, delivering substantial capital gains for investors with emerging market exposure. This result surpassed the fund's benchmark by 1.24 percentage points during a quarter when the MSCI Emerging Markets index rose 23.3%. The fund's success stemmed from meticulous stock selection and sector allocation, reflecting a research-driven approach to uncovering undervalued emerging market equities.

Emerging markets outperformed developed markets significantly in this period, with the S&P 500 gaining 14.8% and the MSCI World index increasing 13.5%. This relative strength highlights the cyclical attractiveness of EM assets and the alpha potential in markets that often have less research coverage and pricing inefficiencies compared to developed markets.

SK Hynix, Samsung Electronics, and TSMC Drive Portfolio Gains

The fund's standout quarterly performance was anchored by semiconductor and technology giants. SK Hynix surged 222.6%, contributing 664 basis points to returns despite representing 8.3% of net asset value (NAV). Samsung Electronics, holding 9.2% of NAV, added 567 basis points with a 96.4% price increase, while TSMC, the largest position at 11.4% of NAV, contributed 385 basis points on a 36.9% gain. Together, these three stocks accounted for 1,616 basis points of the fund's quarterly performance, emphasizing the critical role of semiconductor exposure.

Additional notable contributors included MediaTek, a 1.6% holding that rose 184.1% adding 122 basis points, and Elite Material, at 0.9% of NAV, which increased 106.7%, contributing 106 basis points. These gains reflect both robust fundamentals in the technology and semiconductor sectors and the fund manager's conviction in these positions. The volatility inherent in emerging markets investing means individual stock selection significantly impacts portfolio outcomes.

Portfolio Challenges: Weakness in China-Focused Holdings

Despite strong overall returns, several China-focused holdings detracted from performance. Alibaba Group Holding (1.6% of NAV) declined 21.8%, reducing returns by 43 basis points. Tencent Holdings, the fourth-largest holding at 3.0% of NAV, fell 10.8%, detracting 41 basis points. HYBE (0.2% of NAV) dropped 36.9%, subtracting 17 basis points, while Laopu Gold and China Hongqiao Group, both at 0.2%, declined 43.7% and 39.5% respectively. This underperformance in consumer and materials sectors partially offset gains elsewhere, reflecting challenges in Chinese equities during the quarter.

This divergence between stronger Taiwan and South Korea markets and weaker China exposure highlights the importance of geographic and sector diversification within emerging markets. The fund's multi-cap, multi-region approach mitigates concentration risk, though China remains a meaningful component with future performance influenced by economic and policy developments.

Top 10 Holdings Highlight Taiwan and South Korea Concentration

As of 30 June 2026, the top 10 holdings accounted for 39.6% of NAV, demonstrating a focused yet diversified portfolio. Taiwan and South Korea dominate these positions, with TSMC (11.4%), Samsung Electronics (9.2%), SK Hynix (8.3%), Delta Electronics (1.6%), and MediaTek (1.6%) collectively representing approximately 31.7% of the portfolio. Five of the top 10 holdings are Taiwan-listed, underscoring the fund's significant allocation to this key semiconductor and electronics hub. This regional focus contributed positively during Q2 as Taiwan and South Korea were top-performing EM markets.

Exposure to China-Hong Kong listed companies includes Tencent Holdings, Alibaba Group Holding, and BOC Aviation, making up 4.9% of NAV combined. Singapore-listed OCBC Bank contributes 1.0%, adding financial sector diversification. The concentration in Taiwan and South Korea reflects the manager’s view of compelling value and alpha opportunities in these markets, though it introduces concentration risk for investors to consider.

Sector and Regional Rotation Drives Emerging Markets Outperformance

In Q2 2026, sector and regional dynamics favored the fund’s exposures. IT Services outperformed, while Consumer Discretionary and Energy lagged, aligning with the fund’s heavy weighting in technology and semiconductors and supporting alpha generation. Large-cap stocks outperformed mid and small caps, benefiting major holdings such as TSMC, Samsung, and Tencent.

Regionally, South Korea and Taiwan led major EM markets, while Indonesia and Brazil underperformed. The fund’s overweight in South Korea and Taiwan effectively captured this rotation. The MSCI Emerging Markets benchmark returned 23.3%, against which the fund’s 24.49% return represents a meaningful 1.24 percentage point outperformance driven by disciplined stock selection rather than market timing or leverage.

White Oak Capital’s Proprietary Research and Performance-Aligned Fees

Managed by White Oak Capital Pte. Ltd, founded by Prashant Khemka, Ashoka WhiteOak Emerging Markets Trust plc benefits from a team with deep emerging markets expertise. The manager employs proprietary frameworks—OpcoFinco132; for valuation and ABLEx132; for ESG research—that support a disciplined approach to identifying mispriced emerging market opportunities often overlooked by the broader market.

The fund’s unique fee structure ties manager compensation solely to outperformance over the benchmark, with no fixed management fee. This alignment ensures the manager’s financial interests are directly linked to shareholder returns, differing from traditional asset management models. As of 30 June 2026, White Oak Capital Group manages or advises approximately a35.43 billion in assets, providing scale and resources while maintaining rigorous analytical standards.

Investment Objective and Strategy Focus on Emerging Markets

The fund aims for long-term capital appreciation by investing in equity and equity-related securities providing exposure to global emerging markets. It may hold securities listed on any exchange, including developed markets, provided the companies derive a majority of their economic value or revenues from emerging markets or maintain significant assets or cost bases there. This flexibility allows access to emerging market exposure through both direct EM listings and developed market companies with substantial EM operations.

The strategy is grounded in the belief that emerging markets offer greater alpha potential than developed markets due to informational inefficiencies and lower research coverage. The multi-cap approach spans various market capitalizations across EM regions, balancing exposure to avoid concentration risks associated with focusing solely on large- or small-cap stocks. Geographic diversification further mitigates idiosyncratic risks while capturing emerging markets’ return potential.

Currency Impact and Performance Reporting

Performance figures are reported in GBP, meaning currency fluctuations significantly affect UK investors’ returns. The fund’s holdings are denominated in multiple currencies, including South Korean Won, Taiwan Dollar, Chinese Yuan, and Singapore Dollar. Sterling strength or weakness during the measurement period influences reported returns, though the announcement does not separately quantify currency effects.

Investors should recognize that part of the 24.49% Q2 return may reflect currency movements alongside equity price changes. The fund’s factsheet provides detailed currency impact analysis. For long-term investors, currency effects tend to average out, but for those with shorter horizons or concentrated currency exposure, monitoring currency risk remains important when evaluating AWEM’s performance.

Outlook and Considerations for Investors

Ashoka WhiteOak Emerging Markets Trust plc’s strong Q2 2026 results were driven by favorable market conditions, semiconductor sector strength, and effective stock selection. However, investors should be mindful of potential volatility, as past performance does not guarantee future results. Continued exposure to semiconductor and technology stocks means sector downturns could impact returns. Geographic concentration in Taiwan and South Korea, while beneficial recently, introduces regional risk requiring ongoing assessment.

The performance-aligned fee model benefits investors during outperformance but reduces manager compensation during underperformance. Going forward, investors should monitor emerging market macroeconomic trends, currency fluctuations, semiconductor cycles, and Chinese economic policies, all of which will influence future fund performance. The latest factsheet, available at awemtrust.com/factsheet/, offers current portfolio, sector, regional, and performance data to support informed investment decisions.