Largest Asia Equity Funds
Templeton Asian Growth is the largest fund in the sector with $13 billion assets under management as of the end of August 2014. It is managed by Mark Mobius, a pioneer in emerging-markets investing, who draws on Templeton’s well-resourced emerging markets team located across the world. The bottom-up approach is predominantly long-term and value-oriented, with a strong contrarian emphasis. The portfolio tends to be relatively concentrated and this together with a benchmark-agnostic approach tends to result in large sector and country bets. The fund has historically been more volatile than peers and with a variable track record it is rated Neutral by Morningstar.
Fidelity South East Asia is managed by Teera Chanpongsang, who took over the fund from Allan Liu in January 2014. He is an experienced investor and has successfully run other funds at this group in the past, including an emerging Asia mandate. He runs the fund with the support of Fidelity’s extensive team of analysts and managers, who provide stock research recommendations that ultimately drive this bottom-up process. The manager primarily focuses on growth stocks trading at reasonable valuations, although he is pragmatic and will include value opportunities if they arise. The fund is rated Bronze by Morningstar.
Investec GSF Asian Equity has been run by Greg Kuhnert since 2005, when he was made sole lead manager. The approach relies heavily on the Investec 4Factor model that assesses earnings, valuations, technical and strategy. Highlighted stocks are then subject to further analysis to confirm the output of the model and to assess qualitative issues. The approach has been particularly successful in Asia, producing a track record with a high degree of consistency on a calendar year basis. The fund is rated Silver by Morningstar.
Best Performing Funds Over Three Years
PineBridge Asia ex Japan Small Cap Equity aims to achieve capital appreciation by investing in smaller to medium-sized companies in the Asian region, at least 50% of which will have a market capitalisation of less than $1.5 billion. The fund tends to be concentrated in about 50 holdings, with more than 40% in the top ten stocks. The manager looks to invest in names with strong fundamentals and as a result the portfolio shows a relatively high ROE and a high valuation. It is managed by Elizabeth Soon who has more than 20 years of investment experience.
Macquarie Asia New Stars is a portfolio that focuses on entrepreneurial companies, especially those with a domestic bias. It has a clear overweight to mid-cap names at the expense of mega-caps. The strategy has been managed by John Bugg and Sam Le Cornu since 2008. Quantitative and macro inputs are used to assess stocks, but the main emphasis is placed on detailed bottom-up company research. The managers are supported by a team of analysts in this endeavour and results have been strong versus the mainstream peer group.
JOHCM Asia ex Japan Small and Mid Cap Fund aims to invest for capital growth in companies that generally have a market capitalisation of less than $4 billion. The fund is managed against the MSCI AC Asia ex Japan Small Cap TR Index and has produced a strong track record against that benchmark as well as mainstream peers. The manager, Cho-Yu Kooi, runs the fund in a benchmark-unaware fashion, with sizeable deviations from the index at both the sector and country levels. For example, India was 27% overweight as at the end of June 2015.
