Why Asia keeps coming up when investors talk about what's next?

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Investor confidence has been blowing hot and cold - brighter through the spring, then cooler again in August, where it has remained stable in September. With the mood this changeable and most people sitting tight, here's why Asia keeps coming up when investors think about where to put their money.

First, the mood in the room

Every month we ask a panel of real investors how they're feeling - and lately the mood has been blowing hot and cold. Confidence climbed steadily through the spring, then cooled again in August and was yet to recover in September.

Around two-thirds of investors made no changes at all to their portfolios, and roughly another 1 in 8 considered a change but didn't act. Only about 1 in 5 actually moved. Among these investors, the standout wasn't piling into a hot theme; it was spreading out. Four in ten of them deliberately diversifiedThe process of spreading your investment portfolio across different asset classes, such as partially in shares and partially in bonds, in order to reduce risk. across regions and asset classes, alongside topping up what they already held (40%) and moving more into cash (25%). Cautious, in other words, and casting the net wider.

Which is exactly why an uncertain mood is a good moment to review, not to do something for its own sake, but to check that what you hold is genuinely spread out. And for a growing number of people, that review includes looking beyond the UK.

So, why does Asia keep coming up?

Asia is home to a lot of the companies shaping the next decade - across AI, semiconductors, robotics, automation, software and electric vehicles - alongside a large and fast-growing middle class. And it isn't only a growth story. Some of these markets also pay a meaningful income, which tends to surprise people who think of Asia as purely about capital growth.

It's not a one-way narrative, though; no region is. Investing overseas adds currency swings to the mix and Asian markets can have bigger ups and downs than you might be used to at home. Concentrating in any single region carries its own risk. So, this is about whether Asia earns a slice of a diversified portfolio, not about investing your whole portfolio.

One common way in is through Investment Trusts - funds that are listed on the stock market and run by a professional manager, which can make them a tidy way to get spread across lots of Asian companies at once. Schroders runs three Asian ex-Japan Trusts, each built to do a different job. Here are the three questions they line up against.

Three questions worth asking yourself

1. How do I get income that isn't all riding on the UK?

Plenty of UK investors lean heavily on UK shares, bonds and cash for their income. That's fine until it isn't, it leaves a lot resting on one economy. Asian income can be a genuine diversifier, with a wide spread of dividend-paying companies and strong long-term income prospects.

There's a timely angle too: with talk of changes to ISA rules doing the rounds, some people sitting on large cash holdings are weighing up whether to put more of it to work. A stable equity income option is one thing they're looking at.

The trust here is the Schroder Oriental Income Fund (SOI). Subject to maintaining its dividend record, SOI is on course to achieve Association of Investment Companies (AIC) Dividend Hero status, awarded to Investment Trusts that have increased their dividends for 20 or more consecutive years. It would be the first Asian income strategy to reach this milestone.

2. How do I invest for the long term - including for the next generation?

If your timeframe is measured in multiple years rather than months, the day-to-day noise matters less and the long-run growth story matters more. InflationTerm used to describe how quickly the prices of goods and services is rising over a period of time. In periods of high inflation, prices are increasing rapidly, whereas low inflation means prices are increasing by only a small amount. quietly eating away at cash, university costs, a first house deposit, or simply building something for the next generation through a Junior ISA — these are long-game problems, and Asia's structural growth is a long-game answer.

The Trust here is the Schroder AsiaPacific Fund (SDP), built around that long-term growth. With a history spanning more than 30 years, the Trust has an established track record as a long-term investment. In 2026, it appeared in the AIC’s list of “ISA millionaires”, comprising Investment Trusts that would have grown to more than £1 million if an investor had contributed the full annual ISA allowance each year from 1999 to 2025 and reinvested the dividends.

3. How do I get the growth without the white-knuckle ride?

This is a big one right now. A lot of investors want a piece of Asia's growth but are nervous about how they get there, wary of markets that have been led by a handful of giant tech names, jittery about an AI-related wobble, and tired of the geopolitical whiplash of the past year.

The trust here - the Schroder Asian Total Return Investment Company (ATR) - is designed to smooth that journey out, aiming to capture Asian growth while taking some of the volatility off the table.

So, what now?

If any of those three questions resonate, the individual pieces above go into far more detail on each trust.

But the honest answer to "what should I do?" is: it depends on you. Asia and Investment Trusts won't be right for everyone; it comes down to your timeframe, what you already hold, and how much of a bumpy ride you can live with. The point of reviewing isn't to do something; it's to make sure that whatever you're doing (including doing nothing) is a choice you've actually made.

For more information, please visit www.schroders.com/asiantrusts