Three-year performance
Ezra Sun has managed the Veritas Asian Fund since it began in 2004. It has a Morningstar Analyst rating of Silver and a thematic approach to Asia, focusing on two factors for equity returns: dividend yield and earnings momentum. Assets are allocated between a core portfolio consisting of steady high dividend-yielding companies and shorter-term trading opportunities aiming to capitalise on market inefficiencies and earnings momentum.
Tom Naughton manages the Prusik Asian Equity Income Fund, launched in 2011. It is an Asia specialist with private ownership. The fund is a concentrated portfolio of companies that can maintain a high dividend and potentially grow the dividend over time. It is predominantly bottom-up, with a bias towards mid and small caps. The fund is light on cyclicals, technology and resources, as those sectors do not meet its downside protection needs.
Nitin Bajaj manages the Fidelity Asian Smaller Companies Fund, a smallcap value strategy, with the support of Fidelity’s Asia ex Japan resources. It looks for companies with quality businesses with reasonable valuations offering a margin of safety to limit the prospect of future declines. The preference is for simple business models where the strength and sustainability of a company’s competitive advantage over its peers is clear.
Newcomers
The Matthews Asia Funds – Asia Focus Fund is managed by Kenneth Lowe, with co-managers Michael J Oh and Sharat Shroff. It invests in companies capable of sustainable growth based on fundamentals. This includes companies with a quality management team, strong corporate governance standards, sustainable return on capital, strong free cashflow generation and an attractive valuation in relation to growth and value.
AGCM Asia Growth Fund invests in a high-conviction portfolio with amaximum of 35 holdings. The process is bottom-up, based on fundamental equity research. It aims to identify companies with the best prospects for sustainable growth in revenues and free cashflow over the long term. They believe earnings growth is the principal driver of share prices in the long run, regardless of industry. They look for good entry points and compare and relate earnings growth with valuation levels.
Damian Bird and Chris Darling co-manage the BMO LGM Asian Growthand Income Fund. They research companies with a long-term view and wait for the opportunity to buy without overpaying. The focus is on sustainable business models generating excess returns over their cost of capital through the cycle. They favour asset-light businesses with modest capital needs.
Assets under management
Martin Lau has led the First State Asian Equity Plus Fund for more than a decade, with the help of a 15-strong team based in Asia. Lau applies a tried-and-tested bottom-up stock selection process looking for quality companies that deliver sustainable growth at attractive valuations. Having satisfied the team’s quality criteria, the fund also invests in stocks that pay above-market dividends. The fund is rated Gold.
Aberdeen Global Asia Pacific Equity Fund is led by Flavia Cheong and has a Morningstar Analyst Rating of Silver. A team-based approach seeks to identify quality companies with sustainable and competitive business models, high return on assets and capital, as well as strong balance sheets.
Schroder ISF Asian Opportunities Fund is managed by the experienced Robin Parbrook. He is supported by a team of portfolio managers and a research bench of 26 analysts. The process is bottom-up investment that is quality-growth focused. The emphasis is on management quality, corporate governance and treatment of minority shareholders. The fund’s approach has been executed diligently and has led to a strong track record. Morningstar rates this fund Gold.
