Chern-Yeh Kwok: January 2011
e-fundresearch.com: What is the current size of the fund?
Chern-Yeh Kwok: Y58 billion
e-fundresearch.com: What is the total amount of assets you manage currently?
Chern-Yeh Kwok: As at 31 December 2012 the Japanese equity team managed assets totaling over $1.2 billion in Japanese and Japanese Smaller Company equity portfolios.
e-fundresearch.com: How long have you been in the business as a fund manager?
Chern-Yeh Kwok: I joined the industry in 2005.
e-fundresearch.com: What are the main steps in your investment process and in which area is your competitive edge to add value to investors?
Chern-Yeh Kwok: The Aberdeen equity process dates from the early 1990s. The process is continuously evolving but its competitive advantage derives mainly from the consistency of our approach, and the disciplines that we adhere to, irrespective of market conditions.
The Japanese equity team is based in Tokyo and is supported by Aberdeen regional Asian team headquartered in Singapore. The team's bottom-up investment process begins with a few basic rules: never invest in stocks we haven't visited; never feel obliged to buy a stock because it appears we should (for reasons of size or perceived value as a market proxy, say). Team members conduct hundreds of company visits per year then duly document these meetings and undertake rigorous analysis of the business model.
The team avoids businesses they don't understand or ones with discriminatory shareholder structures. Working from these precepts, stocks become almost self-selecting (provided we have done the essential investigative work). The more difficult decision is how much to pay. Here we place little value in ephemeral events or market 'noise' and more on factors that will ensure we can add value in a demonstrable and consistent way over time. Their focus therefore is on long-term returns rather than short-term gains.
e-fundresearch.com: Which benchmark is most relevant and how should investors compare the fund vs. benchmarks or peer groups?
Chern-Yeh Kwok: Topix 1st Section
We are benchmark aware but not benchmark driven; if we find a disproportionate number of companies we like within any one sector, we are prepared to move significantly above benchmark weighting, and will similarly underweight a sector if we are unable to find companies that pass our criteria. It is important that we highlight these possible instances of deviation from benchmark as it can lead to short term divergence in benchmark relative performance - for some clients, this can be deemed to be 'risky', hence our reiteration of the possibility of such outcomes.
e-fundresearch.com: Which performance did you achieve for the fund YTD and over the past five calendar years in absolute terms and relative to relevant benchmark or other reference indices?
Chern-Yeh Kwok: Over the last year (to 31 December 2012) the returned 27.4% outperforming the benchmark (20.9%) and peer group (20.9%). Over five years the Fund declined by 5.3% per annum compared to a decline of 8.3% from the benchmark and a fall of 9.3% from the peer group.
e-fundresearch.com: Many Thanks!