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Portfolio update August 2026

A rally in Japanese SaaS stocks

Michael Fritzell

Michael Fritzell

— 25 min read
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Portfolio update August 2026

Hi! Welcome to a subscriber-only edition of Asian Century Stocks – a newsletter about Asian value stocks. For a complete list of all previous posts, check out the Table of Contents.

Disclaimer: This article reflects my own views. I am Michael Fritzell, and I write Asian Century Stocks. I am not a licensed financial adviser, and Delante Media Pte Ltd is not licensed or regulated by the Monetary Authority of Singapore to provide financial advisory services. This is not investment advice and does not recommend buying or selling any security. Nothing here takes account of your objectives, financial situation or particular needs. Please do your own research and consult a licensed financial adviser before acting. As of 26 August 2026 — the cut-off date used in this update — I personally held the positions disclosed below, in the sizes shown. Other than those positions, I hold no position in any other company, fund, index, or instrument named anywhere in this post. I will not transact in any security named in this post for at least seven days from the date of publication. Position sizes are disclosed so you can see my conflicts of interest. They are not a model portfolio, an allocation recommendation, or a suggestion that any allocation is suitable for you. Performance figures in this post are historical, unaudited and self-reported. Past performance is not indicative of future results. My only compensation for this newsletter is reader subscriptions. I receive no payment, in cash or in kind, from any company, fund, broker, platform, publication or individual named in this post. Asian Century Stocks is published by Delante Media Pte Ltd, which acts as publisher of record only.

Market commentary

Japan's SaaS stocks have performed extremely well over the past month, in what looks like a short squeeze.

The best index measuring their performance, the "One Capital Cloud Index", has now fully recovered from the early 2026 SaaS-pocalypse:

One Capital Cloud Index (black line)

Part of the outperformance of SaaS stocks can also be the unexpected strength of the Japanese Yen. The US Treasury as well as the Bank of Japan purchased US$5-10 billion worth of yen, causing the currency to strengthen from 157 to 163 against the US Dollar:

The JPY/USD exchange rate. Source: Trading View

From what I hear, Japanese fund managers have started to sour on the export trade and rotated back into domestic growth stocks like software developers. The underperformance of the export-heavy Nikkei 225 is a testament to that view.

Another major event in August was Alibaba's epic US$10 billion follow-on offering — the largest primary issuance by a Hong Kong-listed company ever. Alibaba tried to justify it by saying it needed to fund heavy investments into AI. But the context here is that Alibaba has spent years buying back supposedly undervalued shares, only to reverse at the bottom and hit minorities with massive dilution.

Another big question mark has been the AI capex story. SK Hynix has failed to reach a new high since the June 2026 peak, despite strong memory chip prices. Meanwhile, "anti-AI" stocks like Nintendo and Sony are up from the bottom, suggesting that the market is starting to discount future AI capex spend.

Here's how each of the markets has performed:

Source: Bloomberg

The tech-heavy South Korean and Taiwanese benchmark indices have rebounded over the past month. Indonesian stocks have also partially recovered, despite the continued negative headlines.

I can feel the animal spirits when it comes to Indonesian equities' return. There's still widespread frustration with President Prabowo Subianto, but macro has surprised to the upside, partially thanks to a surge in government spending. Indonesia's FX reserves bottomed in May 2026, and the IDR/USD exchange rate since mid-July. It remains to be seen whether that was the bottom, or just a pause in a longer-term bear market.

Portfolio update

My Asia-focused portfolio rose +10.8% month-on-month in August 2026, measured in US Dollar terms. This is a real portfolio and after commissions and other expenses. Since inception in October 2021, the portfolio's value has increased by +99.8%, equivalent to a +15.2% compound annual growth rate:

Much of last month's performance came from a near-doubling in the share price of the Japanese SaaS company Freee. But Thai stocks, such as cinema operator Major Cineplex and energy drink maker Carabao, also contributed.

The portfolio as at 26 August 2026 is set out below, along with this month's transactions. This is a disclosure, not a model portfolio and not a suggestion to buy or sell stocks.

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