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Hello everyone, welcome to our Asia Pacific ETF podcast.

I'm Christine Huang, Head of ETF Business Asia Pacific.

Today I'm joined by Paul Jackson, Global Head of Asset Allocation Research at Invesco EMEA.

Paul, thanks for joining with us.

How are you today?

I'm great.

Thank you, Christine.

Really nice to see you again cause I know you have to do a lot of traveling recently.

So where have you been very recently?

I've been to Scandinavia, so to Stockholm and Copenhagen.

Unusually warm for this time of year.

Before that I've even been to the Isle of Man where for anybody who is a fan of motorcycle racing, it's where the TT race happens every year.

But I'm in the middle of a global tour.

So you have been seeing a lot of global investors I believe. What are the moods for the investment today?

I would say everybody has enjoyed 2025.

It's been a very good year.

I would say that the mood is kind of mixed.

I think most people are quite optimistic, but there is some caution after seeing such strong performance.

There's obviously a lot of questions about the US. I think the US market, US equities have been the mainstay of many portfolios for some time, but there are increasing questions about that.

On the other hand, I'm detecting more interest in emerging markets and particularly in Chinese equities than I've seen for some time.

Yes, for this region, China is quite important market for most of people's portfolio.

We have seen the strong rebound on the China market both on mainland and the Hong Kong stock markets. What factors have been driving this recovery?

Well, first of all, it, it has been an incredible rebound.

If you look back to the end of 2023, MSCI China is up 60% and at the same time MSCI USA is up 42%. (Source: MSCI, LSEG DataStream and Invesco Strategy & Insights, date of the recording: 19 November 2025 )

So Chinese stocks had been outperforming really for the last two years.

And I think there are a number of factors behind that.

First of all, at the end of 2023, Chinese stocks were actually really good value.

The cyclically adjusted PE ratio.

So that's price divided by a 10 year moving average of earnings had fallen to 12, which is the same level to which the US market fell in March of 2009 when if you remember the S&P 500 bottomed at 666.

Today it's more like 6,666.
(Source: LSEG DataStream, date of the recording : 19 November 2025)

So when you get those sorts of extreme valuation points, it very often points to future strong performance.

The second factor I think is economic performance.

There is lots of doubts and I think concern about the performance of the Chinese economy, but actually 5% GDP growth, which is what we've been seeing, is I think pretty good in an economy where the population is shrinking.

So if you look at it on a GDP per capita basis, China has been growing more rapidly than India since the end of 2019.

And finally, the Chinese authorities have been encouraging the purchase of stocks.

For example, financing has been made available for share buyback schemes.

Some funds have been encouraged to buy equities.

So that combination of good valuations, steady economic performance and more incentives to buy equities, I think taken together, that explains why the market has been so strong.

The Chinese government continues to prioritize technology called innovation, highlighting sectors such as artificial intelligence, robotics, automation and the electric vehicles.

These are the key growth drivers in China as far as we can see. In your view, how competitive is China in the global technology landscape?

Well, I think it is actually pretty competitive.

I'm always amazed when I go to China, even just the day-to-day usage of technology, I find it to be much in advance of what I see in Europe or the US or other parts of the world.

But thinking about it from an economic perspective, if China is going to continue to see growth in income per capita, then it clearly needs to move up the value added chain.

And this is what it's been doing for a number of decades.

And that now means that they have to move into higher tech sectors.

And we've seen evidence of that, for example, in the solar panel industry, which is where I first noticed this, that China has now reached this dominant position in global, in the global solar panel sector.

We're also seeing it now in electric vehicles.

And China, I think has reached or is reaching A dominant position in the global EV market.

And bit by bit, I think they will get to very competitive positions and sometimes dominant positions in a broader range of higher tech sectors.

So I think this is a natural progression and I think over the next 10 to 20 years we will see China being more dominant.

So you have shared a very positive outlook on China market as was a China technology development.

From a broader perspective, how may shifting US, China trade dynamics impact China technology sector and its long-term global competitiveness?

Well, I think first of all I prefer trade not to be restricted.

I think that we all benefit from free trade rather than restricted trade and trade restrictions damage not only the US economy but they do damage partner economies.

Specifically on the question about technology, China has obviously had limits imposed on it in terms of the supply of high performance microchip semiconductors, for example.

There's restrictions on those chips coming into China from US suppliers.

So short term, I don't like these restrictions, but I think longer term China will come out of it in a good place.

Thanks for your valuable insight.

China Index based ETF gives investors A straightforward way to tap into China's growth story by tracking a basket of leading companies.

And all these ETFs offer a global investor the benefit of diversification, efficient access to both onshore and offshore growth themes, while maintaining the flexibility, liquidity and the transparency that ETFs are known for.

At Invesco, we provide globally listed ETF that target exposure to China technology sector.

Explore our website to learn how you can position your portfolio for China's next wave of innovation.

Stay tuned for more from Invesco's podcast, where we continue to share invaluable investment insights in the future.

Hi, I'm Ian Gilbertson, Senior Portfolio Manager and Co Head of US CLOs at Invesco.

Today I'll be discussing an interesting asset class, CLO equity that has garnered significant interest within institutional investment circles because of its attractive return potential, structural advantages and front ended return profile.

To begin, a CLO is a special purpose vehicle that issues securities to finance the acquisition of a diversified portfolio of bank loans.

Investors have the option to invest in either the debt or equity tranches, each offering distinct risks and return profiles.

CLO equity represents the subordinated tranche of a CLO structure.

This asset class is notable for its potential to deliver compelling absolute and risk adjusted returns.

As of November 2024, the global market for CLO equity assets stands at approximately $160 billion, representing around 12% of the $1.3 trillion CLO market.

One of the primary advantages of CLO equity is it's historically high income potential, with quarterly distributions historically ranging between 3 to 4%.

These returns are typically front loaded, allowing investors to receive distributions early in the investments life cycle.

This income can diversify other investments such as private equity, which often has a back ended return profile from its J curve.

CLO equity also offers potential structural benefits.

The financing is long term and locked in, enabling collateral managers to concentrate on active management without liquidity concerns.

This active management can enhance returns through strategic loan selection and trading.

However, the large variation in CLO equity outcomes highlights the importance of a manager's skill in generating outperformance, with bottom quartile managers significantly underperforming the median manager.

In conclusion, CLO equity is an interesting asset class with its potential for higher income, structural advantages, and diversification benefits.

It warrants consideration within an institutional investment strategy.

Hello and welcome. I’m Catherine Chen, Investment Strategist at Invesco Real Estate for Asia Pacific. In this podcast, we’ll explore why Asia Pacific stands out as a compelling destination for real estate investment. We’ll dive into the region’s resilient economic growth, dynamic trade flows, attractive valuations, and highlight the sectors we may find promising.

Let’s take a closer look at the macro backdrop of Asia Pacific. Amid ongoing global geopolitical tensions, we see compelling opportunities across the region—particularly where policymakers are actively supporting growth to cushion the impact of U.S. trade tariffs.

Even prior to the shift in global trade landscape, Asia Pacific had already established itself as a powerhouse in the global economy, currently contributing around 44% of global GDP1. This year, the region is expected to drive over 60% of global economic growth2. Looking ahead, economic momentum is projected to accelerate, with APAC’s GDP projected to be nearly 50% larger than that of the U.S. within the next decade3. While near-term growth may moderate, the region’s underlying fundamentals remain resilient — anchored by the solid economic foundations and proactive fiscal and monetary policy responses.

123Source: Oxford Economics as of April 2025.There is no guarantee that the projection will be reached.

Zooming in on the region, the evolving nature of trade in Asia Pacific continues to support real estate growth. Services trade is gaining momentum, now employing over half of Asia’s workforce. As service industries expand, so does the demand for real estate — from office spaces to logistics hubs and data centers. At the same time, rising urban incomes and greater mobility are fueling housing demand. 

Importantly, this transformation is attracting increasing investment volumes of cross-border capital. Strengthening economic ties within the region have laid the groundwork for deeper investment activities, with international investors actively deploying capital into key APAC markets. Over the past decade, cross-border real estate transaction volumes have surged, underscoring the region’s growing appeal and diversification benefits for global real estate portfolios.

Turning to valuations, Asia Pacific’s diverse and less correlated markets have generally seen capital values lag behind other regions. 

However, as valuations in other markets begin to bottom out—and select APAC sectors are already showing signs of stabilization—combined with a declining interest rate environment, we believe capital values in the region are approaching a trough. This is a timely opportunity for investors looking to capitalize on recovery and may optimize long-term returns.

In terms of sectoral opportunities, we find the living sector and select specialty sectors particularly attractive right now. We are positive on the living sector in Australia, Japan, Korea and China, and see good potential in Korea’s data centers. When evaluating residential housing, we take a granular approach – analyzing demographic trends to identify cohorts with the most pronounced demand-supply imbalances. We then partner with the right operators to strategically scale businesses that address these gaps and deliver longer term value.

Thanks for listening. You can learn more about Asia Pacific real estate by downloading our white paper. 

Stay tuned for our upcoming piece, where we’ll dive deeper into our living strategy across the region.

Thank you.

South Korea has reached a demographic crossroads.

Today, over 20% of its population is over 65, with numbers projected to double by 2050 — marking South Korea as a “super-aged” society.

This surge in the elderly population is creating an unprecedented demand for senior housing and care facilities.

Despite the growing need, South Korea has one of the lowest senior housing penetration rates globally — at less than 1% — compared to 6% in Australia and 11% in the United States. The majority of existing senior care facilities are operated by individual owners.

The severe shortage — in both quantity and quality — of senior living options in Korea is leaving many elderly people without adequate care and accommodation.

Our research also revealed that there are even fewer institutional-quality facilities that cater to seniors in their 70s and 80s who are generally healthy, but may have some mobility issues or non-critical medical conditions.

To address the needs of this growing segment, Invesco embarked on a journey to develop high-quality and thoughtfully designed senior living properties.

As part of this process, we quickly recognized the importance of partnering with an experienced operator that shared our vision to grow with scale, quality, and impact.

Given the highly fragmented nature of the senior care industry, Invesco founded Care Operation — a platform established through a joint venture partnership with Caredoc to directly service the senior living properties within our portfolio.

We chose to partner with Caredoc, one of the top senior care service platform in Korea, due to its vast network and access to caregivers, hospitals, and related facilities nationwide.

Our vision for Care Operation is to create nurturing communities where seniors who value independence and connection feel safe and supported. A place designed with residents in mind, and able to cater to evolving needs.

Wide hallways, step-free access, and age-friendly amenities are all built in to ensure comfort and accessibility.

Around-the-clock on-site caregivers and nurses support daily needs, while responding to any emergencies, providing peace of mind to residents and their families.

Regular health check-ups and preventive care programs — including fitness classes and yoga promote healthy living.

While leisure activities such as art workshops, community gardening, cultural events, and group excursions enhance the community spirit, supporting residents’ physical and social well-being.

Dietary specialists offer residents nutritious meal plans tailored to their individual needs, which residents can enjoy in the privacy of their rooms or in communal dining areas.

Photos of daily activities are also shared with residents’ families, to help families stay connected and give them assurance that their loved ones are healthy, happy and well taken care of.

And 24/7 security, emergency call systems, and manned entry points, ensure residents' safety at all times.

We are committed to meeting the needs of today’s seniors, while building a sustainable model for future generations.

This is more than an investment; it’s a commitment to enhancing the quality of life for South Korea’s aging population and setting an example for other markets facing similar demographic challenges.

Our investment in South Korean senior living is not just addressing a critical societal infrastructure need — we’re building the future we’d want for our grandparents, our parents — and eventually, for ourselves.