Analyst: Aberdeen Asset Management

The team has adopted a long-term investment horizon with the average holding period being more than five years, while some stocks have been in for the best part of two decades. As a result, annual turnover is usually less than 20 per cent.

"If you can pick businesses run by honest, shareholder-friendly management, which are able to earn good returns, then ultimately the share price will take care of itself."

One of the largest holdings is in Oversea-Chinese Banking Corp. "It is a very well capitalised bank, came through the Asian crisis relatively comfortably and is a steady, long-term growth story," comments Mr Hames.

The extremes of valuations in Asia – "markets are either very bullish or everyone is on the window ledge" – means prices can run up very high. When this happens the usual policy is to top slice three or four times before selling completely.

"Other reasons for selling are when the story has changed, we realise we have wrongly analysed a stock, or there is a takeover. You never used to see these in the 1980s and 1990s but Asian companies are now more focused on shareholder value."

Mr Hames believes the past year has been unusual, but insists he is comfortable with the current portfolio construction and that it has been right to be underweight China and overweight in India.

On the downside has been exposure to China. "We do not own any of the banks and only some of the construction companies that have done reasonably well," he concedes. "Some of the Taiwanese tech stocks have been very strong given the hopes for the rebound in the US economy but that is not an area to which we have much exposure."

Looking ahead, Mr Hames cites financial problems in the west, the fact Asia stock markets have run up a long way, and question marks over the sustainability of the Chinese economy as reasons why he remains rather cautious.

"People are possibly being a bit too optimistic economically," he says. "After a very strong run we would be more than happy if markets had a bit of a correction to get rid of the froth we are now seeing in certain parts of markets around the world."

However, he maintains that Asia still has tremendous potential. "It has a good chance of decent growth stretching out for quite a few years," he says. "The region has a strong work ethic, is building better infrastructure and will become less dependent on the developed world. As a long-term investment it is a good bet."