Manish Modi & Yit-Mee Cheah, Fondsmanager des "UBS (Lux) Eq Fd – Asia Opportunity (USD) P - acc" (25.10.2010): "We are focused on stock selection. We favour companies with differentiated competitive strengths which can deliver robust returns on capital over the cycle. We look for companies with that have good growth stories and are attractively valued from a mid-long term perspective. Our continuous endeavour is to find stocks that are mis-priced in the market."
Anna Ho, Fondsmanagerin des "NESTOR Fernost Fonds B" (21.10.2010): "The most important factor in Asia Pacific region is the dominance of China. Each market and economy need to access if it is a beneficiary or a loser in China´s growth. I believe Australia is a net beneficiary, and India will not be threatened by China. Most of the other markets will be to a certain degree threatened by China because there is some competition involved." Ben Surtees, Fondsmanager des "Jupiter JGF Asia Pacific L USD" (20.10.2010): "The starting point for our investment methodology is to identify attractive themes and structural trends that we think can shape Asian economic growth independently of external factors such as whether the US economy expands or contracts. Ideally we try and identify companies that fit into these themes that display predictable revenue and profit streams, enhanced by strong barriers to entry. We are patient investors, and not momentum-driven, so have strong price discipline when it comes to buying a stock."
Allan Liu, Fondsmanager des "Fidelity Funds - South East Asia A USD" (27.10.2010): "Being a bottom-up stock picker, I focus on the fundamentals of a company while making an investment decision. I like companies which are able to generate strong free cash flows and positively surprise with their earnings growth. I also look at valuations using ratios such as price to earnings and price to book value. Balance sheet strength, quality of management and corporate governance practices are some of the other important factors. Market sentiments about a sector or a stock are also considered while arriving at an investment decision.
There is much disparity within the region as some markets and sectors have rallied strongly while others have lagged during 2010. Consequently, I believe bottom-up stock selection using these factors would be even more important in the coming months."
Joseph Tse, Fidelity Funds - Asian Special Sits A" (27.10.2010): "First of all, I keep an eye on the timing and magnitude of the interest rate hikes. Interest rates cannot go lower from the current record-low levels. The improving economic outlook applies increasing pressure on the central banks to normalize interest rates.
Secondly, I pay attention on the pace of economy moving from export-oriented to domestically driven. Domestic demand has been an increasingly large contributor to real GDP growth in Asia, especially after the Global Financial Crisis. Consumption trends across the region remain well-supported by a healthy job market, income growth and strong balance sheets. I will remain overweight in consumer discretionary and underweight in export sectors in order to benefit from these trends.
Finally, I closely monitor the currency swings and their impact on companies. For example, the fundamentals of Korean exporters can change a lot under different FX scenarios."
e-fundresearch: "Which regions and/or sectors are currently overweight or underweight in Asia ex Japan equity funds? What are the reasons for it?"
Manish Modi & Yit-Mee Cheah, Fondsmanager des "UBS (Lux) Eq Fd – Asia Opportunity (USD) P - acc" (25.10.2010): "Sector and country allocation are a mainly driven by bottom up stock picks.
Presently, we are positive on domestic demand beneficiaries. They are relatively more resilient given lower earnings risk and structural growth drivers. As such, we are overweight consumer stocks and banks .
On the other hand, we are underweight sectors most exposed to the global cyclical downturn. We are underweight materials which are trading at full valuations on normalised prices as well as industrials. In particular, we have a cautious outlook on shipbuilding/shipping due to looming supply deliveries.
Bottom up stock picking leads us to an overweight position in India and China. Meanwhile, we are underweight Korea driven by the lack of convincing bottom up picks, including our cautious view on shipping/shipbuilding as explained above."
Anna Ho, Fondsmanagerin des "NESTOR Fernost Fonds B" (21.10.2010): "For the above reason, the most overweight market of Nestor Fernost is China (including HK) with a total of 80% of asset invested. India is 10% weight, and Australia is another 10%. India used to commend a heavier weight but due to the recent rally, valuation of the stocks are getting stretched, we recently lowered its weight from 15% to 10%. We do not and will not invest in other markets in Asia.
In terms of sector allocation, we are extremely underweight the financial sector, 3% vs 31% of our benchmark (MSCI AS Asia Pacific ex-Japan). The reason is the financial sector in China is dominated by state owned banks of mega market capitalisation. Their business is largely policy driven, and their chairmen and CEOs are appointed by the state and are mostly politicians by training. With these kind of companies, analysis of management quality is not possible, and we do not invest in these companies.
The fund overweight heavily on the capital goods and the materials because of the industrial consolidation theme we currently focused on."
Ben Surtees, Fondsmanager des "Jupiter JGF Asia Pacific L USD" (20.10.2010): "At the end of June, the largest country weighting in the fund was China and Hong Kong, reflecting our confidence in the strength of those areas. The rest of the fund is relatively evenly distributed among other Asian Pacific countries in line with the size of their markets. In terms of sectors, the largest proportion of the fund – around 30% – is invested in Financials, in line with the benchmark, and we are significantly underweight oil and gas holdings. We are particularly focused on consumption-related investments as that is where we see the most attractive growth prospects. The difficulty is that valuations command a high premium in this field so we try and find subsectors such as education in order to benefit at a discount."
Allan Liu, Fondsmanager des "Fidelity Funds - South East Asia A USD" (27.10.2010): "The fund’s positioning is a result of bottom-up stock selection approach to portfolio construction. However, broadly speaking the fund is positioned to benefit from structural growth in domestic consumption and increased prosperity in the region. Consequently the fund is overweight the consumer discretionary sector. The fund is also overweight in industrials, particularly due to select ship-builders and airlines operators. This is because of the recovery in orders for shipbuilders and growing air travel and tourism in the region. Select domestic-driven technology companies are favoured because they are benefiting from growth in internet penetration and advertising revenues and thus are more related to discretionary spending. Conversely, the fund is underweight the telecommunications sector because of unfavourable regulatory environment and utilities due to their limited growth prospects."
Joseph Tse, Fidelity Funds - Asian Special Sits A" (27.10.2010): "I remain overweight in China because it is the most promising emerging market of the world. I believe secular trends such as an improving social security network, demographic changes and rapid urbanization will present a multi-year growth story. More importantly, given the Chinese stock markets are largely under-researched, the breadth and depth of the markets offer good risk-reward for stock-pickers.
I maintain an overweight stance on domestic consumption. Asian countries make up a significant part of the world population and the world’s biggest consumer market. Over the last decade, population in Asia, especially rural population has witnessed strong income growth due to a combination of secular drivers and supportive policy actions. Rising income bodes well for consumption stocks, especially when penetration of most consumer durables in Asia remains low, especially in rural areas and small cities. The enormous size of Asian consumer market and low consumer goods penetration mean a significant growth potential.
I remain underweight in Taiwan and technology sector. I am negative on the technology sector outlook, given the sector’s reliance of the developed markets which will likely to be weak in the foreseeable future. Since technology sector accounts for around half of the Taiwanese market, I remain underweight in Taiwan as well.
I maintain an underweight stance on exporters. Rising labour costs, currency appreciation and weak end markets (mainly in the developed markets) present multiple headwinds and are difficult for exporters to overcome.
Finally, I remain underweight in resources as I believe that the resources supercyle may have ended."
e-fundresearch: "Which role will China play in the region in ten years time?"
Manish Modi & Yit-Mee Cheah, Fondsmanager des "UBS (Lux) Eq Fd – Asia Opportunity (USD) P - acc" (25.10.2010): "We typically do not make macro forecasts.
Generally, we believe that China would continue to deliver robust growth over the next few years. The Chinese economy remains on strong footing, backed by strong domestic consumption and infrastructure spending. China has become a major importer as well, not just for commodities and materials, which impact countries like Australia, Brazil, India, Russia, Canada, Chilie and Peru, Middle East, South Africa, Indonesia and Vietnam, but also for machinery and equipments, which China mainly imports from Japan, Korea, Germany and France, and the US. With its large population, the Chinese economy is expected to become the largest economy in the world by 2050 by many estimates.
China will continue to be a dominant force both regionally and globally."
Anna Ho, Fondsmanagerin des "NESTOR Fernost Fonds B" (21.10.2010): "China will be a major consumer and investor in the region. China´s imports of resources, high-end agricultural produce, luxury consumer products such as watches and fashions, will continue to rise. Consumption of services abroad, such as education, and private medical services will also rise very rapidly. China will invest in resource companies across Asia, and in real estates as the newly rich Chinese will look for better living environment with clean air and clean water abroad. Australia is an obvious Asian country benefiting from this development."
Ben Surtees, Fondsmanager des "Jupiter JGF Asia Pacific L USD" (20.10.2010): "In my view, China is and will continue to be the main driver for growth in the Asia Pacific region, alongside India. Although it is very difficult to predict the future, we are confident that China will continue to constitute the largest market in the region and its presence in global economic forums will undoubtedly strengthen. Growth in the economy will be underpinned by social, infrastructural and economic development on a continued unprecedented scale. The growth of the last ten years has created the stepping stones necessary for future economic prosperity."
Allan Liu, Fondsmanager des "Fidelity Funds - South East Asia A USD" (27.10.2010): "I believe China would play a pivotal role in the region’s economic progress. It already is a large importer of commodities and is one of the largest (if not the largest) trading partner for most countries in the South East Asian region. Although the economic growth rate in China is expected to slowdown from recent levels, it would continue to be very strong compared with other major economies of the world. Besides, the drivers of growth in China are expected to shift from exports to domestic consumption and this would create new opportunities for other regional economies."
Joseph Tse, Fidelity Funds - Asian Special Sits A" (27.10.2010): "Growing at a real GDP growth of 8% or above per annum, China is likely to remain the world’s fastest-growing economy. As such, China will remain the region’s growth engine and perhaps the world’s growth engine in the next decade. China will also drive intra-regional trade within Asia, and thus lowering the region’s reliance on the western world. Finally, as power and wealth continue to shift from west to east, China is likely to emerge as the world’s superpower in the next ten years."
e-fundresearch: "Please comment on the performance and risk parameters of your fund in the current year as well as over the past 3 and 5 years."
Manish Modi & Yit-Mee Cheah, Fondsmanager des "UBS (Lux) Eq Fd – Asia Opportunity (USD) P - acc" (25.10.2010): "Pls note that the Asia Opportunity Strategy was incepted in mid Jul 2010. Therefore, no 3/5 yr performance/risk statistics are available. Currently, the tracking error is around 6-8% and you can find the performance from Fundgate."
Anna Ho, Fondsmanagerin des "NESTOR Fernost Fonds B" (21.10.2010): "The fund has a high tracking error, of 13% to 14% typically because it is not buying any index constituents, and because it´s large deviation in the country and sector allocation versus the benchmark. The fund tends to be more volatile with a much higher standard deviation in return than its benchmark because of its small cap orientation. However, the fund tend to outperform strongly in bull markets and contain under performance in bear markets reasonably well. These characteristic will remain in the next 3 to 5 years."
Ben Surtees, Fondsmanager des "Jupiter JGF Asia Pacific L USD" (20.10.2010): "Year to date, the fund has slightly out-performed its benchmark MSCI Asia index*. Over three and five years, we have outperformed, returning a total of 101.9% in the five years to 30th September 2010**. The fund benchmark changed on 1st January 2010 from the FTSE AW Asia Pacific ex Japan, India and Pakistan index to the MSCI AC Asia ex Japan index. I have a bias toward mid- and small-cap companies, so performance often deviates from that of the benchmark, but overall volatility has been lower. Risk parameters are constant, irrespective of the year. We have internal risk committees and management controls in place to ensure that objectives are met. (*Bloomberg; **Financial Express)"
Allan Liu, Fondsmanager des "Fidelity Funds - South East Asia A USD" (27.10.2010):
"The fund strongly outperformed its benchmark in 2006 and in 2007 compared with the benchmark as stock selection in the industrials sector, particularly overweight positions in Korean ship-building and engineering & construction companies, boosted the fund’s relative performance. The exposure to banks and certain stock exchange companies also proved rewarding during those years.
Thereafter, equity markets fell sharply towards the end of 2007 and early 2008. The fund was positioned with a growth bias. As investors’ risk appetite reduced defensive sectors came into focus and the fund underperformed in Q4 2007 and Q1 2008. I initially retained the bias towards industrials because these companies had strong order books and competitive advantages. A bulk of their orders came from Emerging Asia, which did not experience a recession. However, companies in the region found it difficult to raise funds, some orders were cancelled and investors became cautious.
During the middle of 2008, I moved towards more stable cash-generating companies, particularly a number of telecom services and utilities firms, although my long term investment strategy remained intact. These changes aided the fund’s relative performance during the second half of 2008.
In 2009, I was timely in positioning the fund to take advantage of the recovery in the region’s economic activity. As such the stock selection in domestic-focused technology firms and consumer discretionary stocks contributed the most to relative returns and helped the fund recover from its underperformance in 2008. Similarly in the first nine months of 2010, the fund’s outperformance was driven mainly by security selection in the information technology, healthcare and consumer staples sectors."
Joseph Tse, Fidelity Funds - Asian Special Sits A" (27.10.2010): "The fund has outperformed its benchmark (MSCI AC Far East ex Japan Index) on the year-to-date, 3-year and 5-year basis. The outperformance can be largely explained by stock selections, and this is true for all three periods.
Year-to-date, the fund has benefited from several good picks in the IPO arena. Moreover, the fund’s small- and medium-cap bias helped returns, as these spaces took the lead year-to-date. Meanwhile, the fund’s underweight position in ASEAN markets detracted from performance as these countries outperformed on the back of improving fundamentals and rising capital inflows.
Over the past 3 to 5 years, the prudent handling of the Global Financial Crisis helped the returns. Moreover, my belief in the emergence of China and the resources supercycle proved rewarding. Overweight in the internet area and domestic consumption also added to performance. Finally, I identified and invested in a few stocks which progressed from small to medium and then large cap contributed meaningfully."
e-fundresearch: "Where do you see opportunities for Asia Pacific ex Japan stocks and where do you see risks?"
Manish Modi & Yit-Mee Cheah, Fondsmanager des "UBS (Lux) Eq Fd – Asia Opportunity (USD) P - acc" (25.10.2010): "Near term outlook for markets is unclear, with focus shifting between patchy economic data from developed economies while recognising the potential stimulus from further quantitative easing in the US. More certain is the structural Asian consumption growth theme which appears to be gaining traction, particularly in the less-penetrated markets such as China, India and ASEAN.
Long term fundamentals in Asia remain positive as the structural growth drivers remain intact. Demographics and urbanisation are multi-year drivers and the Asian economies are mostly healthy. Pls refer to Q2 on our preferences.
The key risks include: Contagion risks from US and Europe, sharp slowdown in China, rising inflation and faster than expected monetary tightening."
Anna Ho, Fondsmanagerin des "NESTOR Fernost Fonds B" (21.10.2010): "Opportunities lies with the themes of environment protection in China, of emerging middle class in both China and India, of infrastructure boom in India, and of demographic trend in India. The risk lies on countries relatively closed to economic and culture integration such as Japan, and Korea. China will be a regional and global source of inflation, equities generally do better than debt in an inflationary world."
Ben Surtees, Fondsmanager des "Jupiter JGF Asia Pacific L USD" (20.10.2010): "Leading indicators of growth in Asia slowed through the second and third quarters of this year, suggesting that the region was entering a more “normalised” economic environment. However, Asian markets underwent a strong rally in September with some markets seeing highs close to the peaks of 2009 following the extraordinary rebound experienced in Asia. China also surprised by announcing a rate rise in mid-October. While we think it is fair to be cautious as to the sustainability of recent performance, we remain comfortable that strong growth characteristics are in place to support medium-term economic prosperity. In the short term, however, we expect markets to be finely balanced between stronger economic data and bouts of fear over rising inflation and subsequent policy tightening measures."
Allan Liu, Fondsmanager des "Fidelity Funds - South East Asia A USD" (27.10.2010): "A healthy population growth, together with low household debt levels and high savings rate makes Asia an attractive long-term investment destination. Expectations of a low growth global economic environment in near future make the burgeoning domestic economies of South East Asia a more compelling investment opportunity. There is much disparity within the region as some markets and sectors have rallied strongly while others have lagged. Consequently, bottom-up stock selection is expected to be more important in the months ahead.
A key risk for the region would be weaker-than-expected growth in the global economy. While Asian economies are less dependent on exports now than they were before, they are not immune to a significant slowdown in global growth. Another key risk could arise due to growing trade disputes particularly between China and the US."
Joseph Tse, Fidelity Funds - Asian Special Sits A" (27.10.2010): "I see opportunities in the following areas:
• Identifying companies that could successfully climb the value chain. Asian companies are moving up the value chain as the economy rebalances away from low value-added manufacturing. I believe that winners in this space are hard to find, but uncovering them would be extremely rewarding.
• Finding lesser known areas/names to play the secular consumption theme.
• Uncovering recovery situations.
Meanwhile, unforeseen adverse political development (e.g. Taiwan-China relations, political stability in China and elsewhere, North-South Korean relations) presents risks. I focus on stock-picking. I strongly believe that I can pick undervalued stocks through intensive analysis and research."
Alle Daten per 19.10.2010 in Euro:
Jupiter Unit Trust Managers Limited (JUTM) and Jupiter Asset Management Limited (JAM) are both authorised and regulated by the Financial Services Authority and their registered address is 1 Grosvenor Place London SW1X 7JJ. They are both subsidiaries of Jupiter Investment Management Group Limited and the group is collectively known as "Jupiter”. The above commentary represents the views of the Fund Manager at the time of preparation and may be subject to change and this is particularly likely during periods of rapidly changing market circumstances. Their views are not necessarily those of Jupiter and should not be interpreted as investment advice. Every effort is made to ensure the accuracy of any information provided but no assurances or warranties are given.