And it is the consumer and service sectors that are benefitting, as economies like China transition away from primary and manufacturing sectors to become service based and consumption focussed. This is clear from the growth of disposable income outstripping that of GDP.

Of the dozens of countries in Asia, there is almost an obsessive focus on just two (excluding Japan). The fascination with China and India leaves much of the rest of the region under covered and less understood.

China and India will always dominate Asia’s headlines, and with a combined population of 2.7 billionn it is not hard to see why, but that leaves approximately 1.8 billion people across the rest of Asia that receive little or no investor attention.

Similarly, whilst many large corporates in the region have undoubtedly benefitted from this surge in the emergence of Asia’s middle class and growth in consumption, there are many high quality leading smaller companies growing at compelling rates off a lower base. Many of these are too small or illiquid for larger investors.

But for capacity-constrained funds like us we view this as an opportunity; we have the ability to take stakes in growing companies that are effectively forced off many other investors’ radars.

Here, I examine three markets worthy of investor attention.

Vietnam

Despite having an estimated population of 96 million there are some leading businesses serving a wide market that are still relatively small. Likewise, the country’s capital markets are thin and liquidity is limited, restricting investment opportunities.

However, this is changing with the government’s privatisation plans accelerating, and several state-owned assets, from airlines and airports to milk manufacturers and breweries, are being sold in a bid to attract foreign investment.

Private companies have also matured and typical frontier market corporate governance missteps of the past are now the exception rather than the rule.

This is great news for investors looking to invest in high growth market with attractive demographics where opportunities have until now been few and far between.

One example of an emerging private company is Thien Long Group, Vietnam’s largest stationery business with 60% market share – yet revenue exceeded $100m for only the first time last year and earnings have more doubled over the past four years.

A patient investor would have been rewarded with the share price climbing nearly fourfold in three years.

Sri Lanka

From less than half a million arrivals in 2009, the country is on course to welcome more than two million visitors this year, and targeting twice that by 2020.

President Maithripala Sirisena is now making headway in his effort to create a more balanced and inclusive economy.

A balance is also being struck between relations with China and with the West; infrastructure projects are recommencing; and the economy is in decent shape, with the GDP growth rate averaging 5.95% from 2003 until 2017.

A recently oversubscribed government bond issue and an IMF loan deal, as well as some marquee foreign direct investments all support growing investor confident.

What attracts us most is the growth momentum coming from a low base. The combined market cap of the Colombo Srock Exchange is about 23% of GDP – alongside Bangladesh, the lowest in Asia by a long way. Even Vietnam, the next biggest is more than 30%.

Local companies such as Cargills, a supermarket operator selling local brands, are outstripping the growth of long established multi nationals such as Nestlé, with quicker response times to changing local tastes and better innovation.

With low market penetration rates, the company faces a long runway for growth. The company’s shares have enjoyed a 15% CAGR in USD terms over the past decade.

Bangladesh

Bangladesh has a population of more than 160 million and strong real GDP growth of between 6% and 7% for the best part of a decade, albeit starting from a low base; GDP per capita is a meagre $1,500.

That said, low income levels are one of the market’s strongest competitive advantages – wages are a third of those in China which is helping propel the ready-made garment industry and build up foreign reserves. 

Demographics are attractive too, with a young, fast growing population and low urbanisation rate. This presents a picture of limited consumption from a largely rural population that doesn’t earn very much.

It is reflected in the nascent stage of the country’s capital market. Based on market capitalisation to GDP, Bangladesh is at the very bottom of the curve at about 19%.

Remarkably, given the size of the country, only six stocks are capitalised at more than $1bn, yet the exchange functions well with limited restrictions on foreign investment and decent liquidity at more than $100m traded daily on average. 

Investment opportunities range from locally listed multinational subsidiaries such as BAT and Telenor’s Grameenphone to local champions like Olympic Biscuits and Square Pharmaceuticals.