Performance Review 2008Soo Hai Lim: "Please note that the Fund was converted to Asean Frontiers as at 1 Aug 2008. Prior to Aug 2008, The Fund was managed under a Pacific mandate. The Asean Frontier Fund faced a difficult macro environment in the first few months of inception with the Lehman collapse, credit markets meltdown leading to evaporation of trade credit. In the six months to end Dec 2008, the Fund underperformed by about 3.7% in an environment where only the most underowned or companies with the best balance sheets could outperform."
Performance Review 2009
Soo Hai Lim: "The Fund outperformed strongly in 2009 due to strong stock selection as our focus on stocks with unrecognized earnings growth was well rewarded as macro environment normalized from the extremes in late 2008 and early 2009. Having conviction in the long term outlook of these Asean economies and companies gave us conviction to buy into strong franchises that were oversold in the risk aversion and which subsequently rallied strongly. Performance was also helped by our overweight in Indonesia and underweight in Malaysia."
Performance Review 2010
Soo Hai Lim: "The Fund continued to outperform, again with stock selection contributing to most of the outperformance. In addition, our early exposure to frontier market Sri Lanka, boosted performance as the market was one of the best performing in the world in 2010."
Performance since 2008
Please see comments from above 3 periods which cover the full period.
Investment Process and Strategy – How does the Fund Manager Invest?
Soo Hai Lim: "We invest based on a growth at a reasonable price philosophy, with a process structured around looking for stocks with unrecognized earnings growth as we believe that positive earnings surprise lead to stock outperformance.
We are bottom up stock pickers and portfolio is built up from stocks that we believe have highest upside potential at an appropriate risk level. We do use top down macro views to help guide and direct research focus/efforts but at the end of the day, the portfolio composition is based on a bottom up stock selection."
Soo Hai Lim: "We believe the ASEAN region is poised for many years of superior economic growth due to its young demographic profile and varied strengths of the various economies. Since the Asian financial crisis in 1997, these countries have restructure and deleveraged and are now very strong in terms of balance sheets and fiscal positions. Economic growth which has been boosted by consumption will increasingly also be supplemented by increasing fixed asset investments as infrastructure spending ramps up. Further, the region is a producer of many commodities which are seeing strong demand as China, India urbanizes. Markets in ASEAN should continue to re-rate as valuations are still undemanding and earnings growth."