top ranked funds newcomers
Fund AnAlysis
n First state investments is a specialist Asia Pacific fund house,
as reflected by the number of funds appearing in the tables
showing performance over the past three years, as well as
having two of the largest funds investing in the Asia
Pacific ex Japan sector.
n the newest fund in its range is its sustainability Fund, launched in
december 2005, so just coming up to its all-important three-year
anniversary. it is managed by david Gait alongside Angus tulloch.
n it shares many of the traits of its flagship fund – the Asia Pacific
Leaders Fund – with a similar number of holdings (60 compared
to 48), similar top-ten holdings (including Hong kong and china
Gas, newcrest mining and Woodside Petroleum) and similar poor
recent performance (-16.9% compared to -12.2% over the three
months to the end of september).
n michael kerley’s Henderson Horizon Asian dividend income Fund
has also struggled, returning -22.53% in the past three months
and -33.39% year-to-date. He has recently increased his weighting
to china, funded by reducing his position in taiwan.
Fund Picker’s
comment
Justin Oliver,
CO-manager, COllins
stewart seleCtfunds
Any recent investors in
Asia must be wondering
what they have let themselves
in for – stock markets
across the region have
underperformed developed
markets to a large extent,
irrespective of the fundamentals
which would argue
otherwise.
This partly explains why
we believe the region may
lag during any subsequent
global rebound – investors
have again been scarred
by their experience and
may prove slow to regain
their trust. Developed markets
may seem, initially, a
safer bet.
Given that investment
in the region is fraught
with danger at even the
best of times, our preference
is always to invest
the bulk of our allocation
with experienced managers
– those who have
been through several
investment cycles and can
strip away both the euphoria
and panic which inevitably
accompanies invest-
top 3 performing new funds vs peer group
%
10
-10
First State Asia
-15
Pac Sustain A Acc
MSCI World $
-20
Oct ’07 Dec
Feb ’08 Apr
Jun
Source: Morningstar
5
0
-5
Henderson Horizon Asia Div Inc A1 $
top 10 Asia pacific ex Japan funds with less than a 3-year track record
DEcEMbER 2008 [www.portfolio-adviser.com] PORTFOLIO ADVISER
Fund selector AsiA pAciFic ex JApAn Funds
LODH Invest Glbl
Asia Pac P $ Acc
1-year 1-year 1-year 1-year 1-year Fund Launch domicile
% chg Alpha Beta r² volatility size (£m) date
lOdH inv global asia Pacific P $ a -18.26 0.16 0.73 0.87 2.61 191.18 4 may ’07 luxembourg
first state asia Pacific sustainable a -18.46 0.09 0.64 0.82 2.36 62.68 19 dec ’05 uK
Henderson Hf asian div a1 $ -18.69 0.16 0.74 0.84 2.67 59.48 23 Oct ’06 luxembourg
mgi Pacific equity i1 € -18.98 0.15 0.73 0.7 2.89 16.54 19 sep ’06 ireland
Henderson Hf asian div X -19.35 0.14 0.73 0.85 2.65 0.22 23 Oct ’06 luxembourg
marlborough far east a inc -22.98 0.1 0.8 0.86 2.87 50.32 21 nov ’05 uK
newton asian income -23.2 0.02 0.71 0.8 2.62 141.88 30 nov ’05 uK
ssga asia Pacific ex Japan equity tr acc -26.11 0.03 0.8 0.75 3.09 16.48 17 nov ’06 uK
Comgest growth asia ex Japan $a -27.87 -0.01 0.82 0.88 2.91 114.69 14 Jul ’06 ireland
Henderson asia Pacific ex Jap equity Y -28.96 -0.02 0.84 0.88 2.97 186 1 dec ’05 uK
to 6 Oct ’08. Bid to bid, £, gross income, no cap. source: morningstar
ment at various stages.
It is not a region for the
faint-hearted or the inexperienced,
in our opinion.
Some of the recent boutique
funds that had a
heavy pro-growth asset
allocation and invested in
the frontier countries of
Asia, for example Vietnam,
have been particularly hurt
by recent events.
One of the newcomers
in the table that we have
looked at in the past is the
Comgest Growth Asia ex
Japan Fund, a name that is
less well known in the UK
than many on the list.
While it appears as
a newcomer, the head
of the team is anything
but – Paris-based Vincent
Strauss has been heavily
involved in the region
since 1982 when he was
appointed head of Asian
portfolio management at
Indosuez Bank.
This is a conviction fund
typically holding 40 to 50
stocks, with little or no
Aug
Oct
attention paid to benchmark
construction – the
ability to deliver absolute
returns over a three- to
five-year time horizon is
viewed as most important.
It has a growth style
and as a rule of thumb
companies need to demonstrate
the ability to deliver
return on equity or capital
employed of at least 15% a
year, independent of general
market conditions, to
make it into the portfolio.
Company visits and onthe-ground
due diligence
are seen as key value-
added activities.
The fund has done well
given it does not invest in
Australia – the success
story of many Asia Pacific
funds in recent times.
Comgest’s offshore fund is
a mirror of a French-based
fund that has an extremely
strong long-term track
record, particularly aided
by an impressive relative
performance between 2002
and 2006.
top 10 newcomers – 1-year risk/return
Return (%)
-15
-20
-25
-30
First State Asia
Pacific Sust A
LODH Inv Global
Asia Pacific P $ A
Henderson HF
Asian Div X
Newton Asian Income
Comgest Growth Henderson Asia
-35
Asia ex Japan $A Pacific ex Jap Eq Y
2
2.5 3 3.5
Standard deviation (%)
To 6 Oct ’08. Bid to bid, £, gross income, no cap
Source: Morningstar
“
Given investment
in the region is
fraught with danger
at even the best of
times, our preference
is always to invest
most of our allocation
with experienced
”
managers
Henderson HF
Asian Div A1 $
MGI Pacific
Equity I1 €
Marlborough
Far East A Inc
SSgA Asia Pacific
ex Japan Eq Tr Acc
Sector avg
35
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