ASEAN-A mixed bag.
In Southeast Asia, the fund is underweight Malaysia. Yeung believes the country’s high foreign debt level could result in strong market volatility when the US raises interest rates.
The fund has just a 4.9% allocation toward Malaysia while the country has a 10.8% weighting in the fund’s benchmark index.
The manager is also underweight Thailand.
“We are monitoring Thailand ahead of the election and are following a stock specific approach.”
In regards to Indonesia, the allocation is marginally underweight. But Bank Rakyat Indonesia features in the top 10 holdings list.
The fund house has been overweight the Philippines for quite some time, she said. The country has a 6.4% weighting in the portfolio compared to its 4.2% weighting in the index.
“The Philippines is the best performing economy from a macro story,” Yeung said. “Consumption is picking up. Moody’s has upgraded the country’s rating. But like India, the market is becoming very expensive.”
