Summary of Key Points from the Conference Call Industry and Company Focus - **Industry**: Asia Emerging Markets (EM) Equity Strategy - **Company**: Morgan Stanley Asia Core Insights and Arguments 1. **2026 Risk Outlook**: Investors are generally optimistic about the 2026 risk outlook, with a strong consensus on the US-relative valuation appeal within Asia's growth and AI sectors [1][2][3] 2. **Market Positioning**: A recommendation for tight market-risk positions versus benchmarks, with a slight preference for Japan over Emerging Markets (EM) in 2026 [2][3] 3. **Investment Themes**: Key themes driving investment spending include AI & Tech Diffusion, Multipolar World, Future of Energy, and Longevity, indicating a multi-year recovery in capital expenditure (capex) [3][4] 4. **China's AI Sector**: Investors are debating the scale of global AI capex, particularly in China, where monetization is still in early phases, and there are concerns about power bottlenecks [4][5] 5. **Stock Selection**: Emphasis on stock selection through various focus lists (GEM, APxJ, China, Japan, and thematic focus) to generate alpha amid macro uncertainty [2][3] Additional Important Insights 1. **Asian Value-Up Initiatives**: Discussions on reforms in Japan and Korea, including Japan's Corporate Governance code revision and Korea's Commercial Code changes, are expected to impact the 2026 AGM season [11][12] 2. **Catalysts for 2026**: Upcoming diplomatic and electoral events, including APEC and G20 summits, are seen as opportunities for active investing [13][21] 3. **Sector Recommendations**: An overweight position is advised on Japan, India, Brazil, UAE, and Singapore, while maintaining a cautious stance on Saudi Arabia, Indonesia, and Taiwan [10][13] 4. **Capex to Sales Comparison**: Asian AI players are expected to have lower capital intensity compared to US counterparts, which may influence investment strategies [16][18] Conclusion The conference call highlighted a constructive outlook for 2026, emphasizing strategic positioning in key markets and sectors, particularly in Asia. Investors are encouraged to focus on stock selection and remain aware of upcoming reforms and geopolitical events that could impact market dynamics.

Summary of Key Points from the Thematic Research Report Industry and Company Overview - The report focuses on thematic investing across four main themes: AI & Tech Diffusion, Future of Energy, Longevity, and Multipolar World, with an emphasis on identifying investment opportunities and risks through a quantitative lens [2][12][18]. Core Insights and Arguments - **Quantitative Framework**: The report utilizes a systematic approach to evaluate themes through six lenses: performance, factors, revisions, bottom-up estimates, valuation, and fund positioning, which helps in identifying standout investment opportunities [2][4][21]. - **AI Adoption Impact**: The non-linear progress in AI is highlighted as a significant driver of stock performance, with expectations that nearly 90% of occupations will be affected by AI advancements [3][15]. - **Performance Metrics**: The report provides cumulative returns and performance statistics for various themes, indicating strong performance in AI Adopters and Powering AI, while also noting the potential upside in Preparing for an Aging Population despite recent softer performance [5][57]. Thematic Standouts - **AI Adopters**: Demonstrates strong performance over 1Y and 3Y, with reasonable valuation compared to peers [5]. - **Powering AI**: Offers robust returns and leading revisions, although valuation is considered elevated [5]. - **Preparing for an Aging Population**: Shows the largest upside potential with improving revisions, but recent performance has been weaker [5]. - **Defense**: Leads in information ratios across various time frames, supported by improving revisions and estimates [5]. Additional Important Insights - **Sector Composition**: The report details sector exposures for each theme, revealing significant underweights in Financials, Materials, and Industrials across most themes, with notable concentrations in IT and Energy sectors [32][36]. - **Regional Distribution**: The themes exhibit varying regional exposures, with a strong US tilt in AI & Tech Diffusion and Longevity, while Future of Energy shows a more balanced global distribution [38][40][41]. - **Investment Strategy**: A disciplined investment approach is recommended, combining quantitative analysis with sector-specific insights to avoid common pitfalls in thematic investing [11][17]. Performance Overview - **Cumulative Returns**: The report includes detailed performance statistics for each theme, with AI & Tech Diffusion showing a CAGR of 53.5% over 3 years and 48.9% over 1 year, indicating strong growth potential [52]. - **Risk Metrics**: Various risk-adjusted performance metrics are provided, including maximum drawdown and information ratios, which help in assessing the risk profile of thematic investments [52][57]. This comprehensive analysis provides a structured view of the thematic investment landscape, highlighting key opportunities and risks while emphasizing the importance of a quantitative approach in navigating market volatility.