23 January 2024

Ashoka WhiteOak Emerging Markets Trust plc

(the "Company")

Monthly Update - December 2023

The Company's monthly factsheet as at 31 December 2023 is now available: https://awemtrust.com/factsheet/

The Company has delivered a NAV total return of 7.37% since inception to 31 December 2023, outperforming the benchmark MSCI EM² (in sterling terms) by 260bps over the same period. Among other factors, outperformance was led by stock selection in small and mid-caps. For the month of December 2023, the NAV was up 3.6%, outperforming the benchmark by 40bps.

Key Contributors

Key Detractors

Source: Factset. Past performance does not predict future returns. The performance calculation is based on GBP. Currency fluctuations will also affect the value of an investment.

¹ The proceeds raised from IPO were substantially invested as at 30 June 2023.

² Benchmark index - MSCI Emerging Markets Net Return Sterling (Bloomberg MGEF)

 Past performance cannot be relied on as a guide to future performance.

Top 10 Holdings

Key Contributors

Gokaldas Exports is one of the leading garment manufacturers in India and one of the top garment exporters in the region. The positive investment thesis is based on India emerging as an alternative destination for global brands looking to de-risk their supply chain from China, as well as Gokaldas being considered as a partner of choice from India given the company's long-standing relationship with top global brands and improved execution capabilities led by the new CEO. The company underwent an ownership and management change in 2018, after which it turned around from a low-growth, loss-making enterprise to a profitable one, charting a multi-year growth path. The company is expanding within India to take advantage of the incentives offered by the government while exploring options outside India to create manufacturing capacities (both organically and through acquisitions) in low-cost regions and/or nations which have favourable trade terms with large importing countries like the US, UK, European Union, etc. The new management has created a robust system to ensure operational excellence and high-quality customer service, which will likely lead to industry-leading growth and financial performance in the near future.

Disco manufactures capital equipment for the semiconductor industry, the main products being grinders (to thin semiconductor wafers), dicers (to cut completed wafers into individual chips) and related consumables. Owing to its technical prowess, Disco commands a market share of more than 80%. Recent developments within the semiconductor industry, such as quicker than expected adoption of silicon carbide in electric vehicles, and the adoption of chiplets/advanced packaging have led to Disco's strong operating performance compared to its peers. Silicon carbide is amongst the hardest materials, so dicing and grinding such materials takes longer, requiring more equipment and consumables. These factors have led to a resilient demand environment for Disco's products despite the weakness in the semiconductor sector. These reasons could have contributed to the recent stock performance.

Qualitas Controlodara is the leading automobile insurer in Mexico, with nearly 35% market share. At 95.3%, its combined ratio is among the lowest in the Mexican Auto Insurance segment. Qualitas has held onto a 30%+ market share in Mexico's Auto Insurance segment for almost a decade, with a 40%+ market share in the fast-growing Trucks and Commercial Vehicle Segment. Qualitas has built a strong moat with its brand, easy claims process, and large network of third-party agents. In addition, Qualitas's foray into health insurance and expansion into other Andean countries like Peru provide future growth optionality. The operating performance has recently improved with a 9.2% Return on Invested Portfolio (9M23), compared to 1.6% during 9M22. The positive momentum in operating performance has been one of the contributing factors to the recent stock price performance.

Key Detractors

Budweiser Brewing APAC is the leading premium brewer in China (85% of EBITDA) with ~40% market share of premium beer and ~16% of overall volumes on the back of leading brands, including Budweiser and Corona. It also has a smaller but market-leading position in Korea. Over time, most beer markets globally tend to premiumize, resulting in attractive earnings growth within a moat for breweries that are able to manage brands well. Although the benefit of reopening of the economy was slower than expected across all brewers in China, Chinese brewers have been following this premiumization path over the last 5-10 years. We believe that COVID has obscured some of Budweiser APAC's underlying strengths, given its relatively short listing history (The IPO was in 2019). In 2023, the company's smaller Korean business (~15% of EBITDA) faced competitive pressure. We believe that the above factor and weaker than expected reopening effects in China contributed to weak stock performance.

AIA is a Hong Kong listed insurer with a presence in multiple emerging markets, including Hong Kong (35% of Embedded Value or EV), Mainland China (18% of EV), and Thailand (12% of EV), along with a growing presence in other ASEAN countries and India as well. AIA is primarily an agency-driven business with a focus on selling protection products. In partnership with South Africa based Discovery, AIA launched 'AIA Vitality', bringing the successful health insurance and loyalty program to its Asian markets. AIA maintains a prudent investment portfolio with 75% of the book in fixed-income securities (50% of which is in government bonds), while BB and below rated securities make up ~ 7% of the portfolio. The company's focus to return excess capital to shareholders is noteworthy, with USD 3.6 bn returned in 1H23. However, operational performance was likely affected by slower than expected economic rebound in China.

Hong Kong Exchanges & Clearing (HKEX) owns and operates the only stock and futures exchange in Hong Kong and the London Metals Exchange (LME). HKEX functions as a monopoly in Hong Kong, which is unlikely to change, although it competes for listings with other global exchanges. Overall, HKEX operates in a supportive ecosystem, with the number of listings and trading volumes growing consistently over the years. The 'Connect Program', a market access platform between Hong Kong and mainland China, already represents 34% of the volume and provides a structural growth driver as China liberalizes its capital markets. The stock underperformed in 2023 due to subdued trading volumes on the back of poor equity market performance in Hong Kong and China and muted investor sentiment.

About Ashoka WhiteOak Emerging Markets Trust plc

Ashoka WhiteOak Emerging Markets Trust plc (AWEMT) is a UK investment trust seeking to achieve long-term capital appreciation primarily through investing in a multi-cap portfolio of equities that provide exposure to global emerging markets. Advised by White Oak Capital Partners Pte. Ltd, founded by Prashant Khemka with leading Emerging Markets investment experience. White Oak Capital Group has delivered an exceptional track record for its other strategies, and has £4.9 billion in assets under management or advisory⁴. Analytical approach integral to disciplined research process underpinned by proprietary frameworks OpcoFinco™ for valuation and ABLEx^TM for ESG research. The team at WhiteOak believes that emerging markets present potential for higher alpha. EM markets remain under-researched and inefficient. AWEM leverages WhiteOak's investment approach to capture the higher alpha potential in these markets. No fixed management fee. Manager remuneration is aligned with alpha generation and hence shareholders' interest. The Investment Manager is remunerated solely as a function of outperformance over the benchmark.

⁴ Data as at 31^th Dec 2023. AUM data refers to aggregate assets under management or investment advisory for White Oak Group.

 Further Information

For further information on the Company's investment strategy and portfolio construction approach as well as details of the portfolio market cap, regional and sector composition please refer to the latest factsheet.

Investment Objective

To achieve long-term capital appreciation, primarily investing in equity and equity-related securities that provide exposure to global emerging markets.

Summary of Investment Policy

The Company shall invest primarily in securities admitted to trading on any stock exchange (which may include stock exchanges in Developed Markets) that provide exposure to companies that are domiciled in Global Emerging Markets (EMs), or that are domiciled in Developed Markets but at the time of investment, derive a majority of their economic value, revenues or profits from, or whose assets or cost base are mainly located in EMs.

The Company's LEI is 254900Z4X5Y7NTODRI75

For further information:

Company Secretary

WhiteOak Capital Partners Pte Ltd.

Ellora Partners

Buchanan