FUNDS

We look at some favourite funds to ac­cess this growth re­gion

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Achiev­ing di­ver­si­fied ex­po­sure to Asia

Not­with­stand­ing the grow­ing ten­sions over trade sparked by a more bel­liger­ent White House, the eco­nomic group­ing which in­cludes In­dia, China and South­east Asia is ex­pected to achieve growth of 6.5% in 2018 ac­cord­ing to the In­ter­na­tional Mon­e­tary Fund.

This com­pares with the global av­er­age at 3.9% and the 2.4% an­tic­i­pated for the world’s ad­vanced economies.

In­vestors look­ing to tap into this growth can to do so through a fairly large col­lec­tion of funds, ex­change-traded funds and in­vest­ment trusts.

Pick­ing the right Asian fund is im­por­tant as these coun­tries have less ma­ture cap­i­tal mar­kets and de­vel­oped cor­po­rate cul­tures mak­ing it ar­guably harder to avoid loss-mak­ing in­vest­ments.

Mak­ing this process eas­ier is AJ Bell’s favourite funds list. Cho­sen by ex­perts, these collectives are se­lected for in­come and medium to longterm growth with an em­pha­sis on value, track record and qual­ity fund man­age­ment.

In this ar­ti­cle we look at a trio of funds which make the cut, pro­fil­ing each of them in turn.

be­came the sole man­ager of In­vesco Per­pet­ual Asian

(BJ04DS3) in May 2017 and uses a value ap­proach, seek­ing out stocks he be­lieves to be trad­ing at be­low their fair value and hold­ing them un­til the mar­ket re­alises their full po­ten­tial and the price in­creases.

The man­ager is very ex­pe­ri­enced in this style of in­vest­ing and it has pro­duced good re­sults over time, although in­vestors should be aware that over short time pe­ri­ods this style may be out of favour and this could lead to un­der­per­for­mance.

In­vesco Per­pet­ual Asian aims to achieve cap­i­tal growth in Asia and Aus­trala­sia, ex­clud­ing Ja­pan, with top hold­ings in­clud­ing Chi­nese e-com­merce gi­ant JD.com, Sam­sung and Chi­nese in­ter­net search provider Baidu.

This may be a rel­a­tively new fund launch for Jupiter, but its man­ager Ja­son Pid­cock is a sea­soned prac­ti­tioner of Asian in­come in­vest­ing. Revered in fund man­age­ment cir­cles for his Asia in­vest­ment nous, Pid­cock’s well-de­fined in­vest­ment process in­volves seek­ing out high qual­ity com­pa­nies that can in­crease their div­i­dends as they grow over time.

He has a fun­da­men­tals-based in­vest­ment strat­egy for Jupiter Asian In­come (BZ2YMT7),

back­ing com­pa­nies which have scal­able and sus­tain­able busi­ness mod­els, a com­mit­ment to shar­ing prof­its with share­hold­ers through div­i­dends and which trade at a com­pelling val­u­a­tion too. This is a strong of­fer­ing for in­vestors who wish to ben­e­fit from the re­gion’s long-term in­come and growth po­ten­tial.

Pid­cock has put money to work with the likes of gam­ing re­sorts de­vel­oper and op­er­a­tor Sands China, Korean na­tional cham­pion Sam­sung Elec­tron­ics and Tai­wan­based com­put­ers-to-con­sumer elec­tron­ics maker Hon Hai Pre­ci­sion. Re­search firm Square Mile says the port­fo­lio of 40-to50 com­pa­nies ‘will in­clude stocks that have higher div­i­dend yields than the mar­ket as well as lower yield­ing names with com­pelling growth prospects.

As well as re­view­ing the macroe­co­nomic en­vi­ron­ment across the re­gion, Pid­cock has ac­cess to the ex­per­tise of Jupiter’s wider emerg­ing mar­kets team and the broader skills of the global eq­uity team. All this helps him to build a bet­ter pic­ture of where a com­pany is po­si­tioned in its mar­ket.’

Long-term growth of cap­i­tal is the mis­sion of Ste­wart In­vestors

Asia Pa­cific Lead­ers (3387476) , which in­vests in large and mid-cap com­pa­nies in­cor­po­rated, listed or con­duct­ing the bulk of their busi­ness in the Asia Pa­cific re­gion (ex. Ja­pan, but in­clud­ing Aus­tralia and New Zealand).

Man­aged by one of the most highly re­garded teams in­vest­ing in the re­gion, with David Gait and Sashi Reddy the named co-man­agers of the £8.3bn OEIC, the in­vest­ment process is un­der­pinned by a strong qual­ity mantra, while the com­pa­nies it in­vests in gen­er­ally have a mar­ket value of at least $1bn.

Gait and Reddy’s ap­proach means the fund can some­times lag in very strong mar­kets, but it tends to be less volatile than other funds in­vest­ing in the re­gion and over the long term has pro­duced ex­cel­lent re­sults for in­vestors, boast­ing ten year an­nu­alised re­turns of 12.6%.

Lead­ing port­fo­lio po­si­tions in­clude IT ser­vices ti­tan Tata Con­sul­tancy Ser­vices, cars-to­trac­tors maker Mahin­dra & Mahin­dra and In­dia fi­nan­cial out­fit CSL. (JC)

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