New Asia Fund overweight in China and India as regional stability continues
While Asia continues its long-term strong outperformance over other emerging markets stocks, 2014 has also seen it outperform most other developed markets (including those in Australia). Nikko Asset Management’s New Asia Fund (the Fund) has overweight positions in both China and India as a period of sustained regional stability and reform looks set to continue.
“The weighting of Chinese and Indian stocks in the Fund reflects the benefits of the reform programs being implemented in those markets,” according to Peter Sartori, the Fund Portfolio Manager and Head of Asian Equities for Nikko Asset Management Asia. “While the relative stability of the Philippines, Indonesia and Singapore has contributed to a promising period of economic development across the region, the big difference for Asia in 2014 is the two big emerging markets – China and India – have been performing much better.”
Based in Asia for over 50 years, Nikko Asset Management’s vantage point—extending from east to west—distinguishes its investment approach in the region, which is demonstrated in its broadening product portfolio designed to meet the sophisticated needs of Australian investors.
“As we position Nikko Asset Management to be Asia’s premier global asset manager, we recognise the importance of raising the profile of the changes taking place in Asia,” Sartori said. “The next 12-24 months will be critical for shaping investors’ perceptions of Asia from that of a perpetually-emerging region into one that is fully fledged.”
Sartori and his sixteen member team are based in Singapore, from where they travel extensively around the region uncovering investment opportunities. On an annual basis they hold approximately six hundred meetings with company management, companies either already held in the portfolio as well as potential new investments. Macro-level considerations also play a large part in the team’s investment process.
“India is performing very strongly in 2014 due to a game-changing election result in May, which is lifting the entire country, allowing it to begin to realise its undoubted potential and break away from the now maligned BRIC moniker,” Sartori said. “While in China, the government is now beginning to implement much-needed reforms. The fund has done very well with regard to stock selection in China over the last three years. China is the cheapest market in the region and with the ongoing implementation of reforms, we expect the overall market to continue to push higher.”
Sartori founded the Fund (previously known as the TAAM New Asia Fund) in 2005 along with Sydney-based Treasury Group Ltd. The Fund has a ‘Recommended’ rating from both Zenith and Lonsec. In 2014 the Fund was named as a Zenith Awards finalist in the International equities – emerging markets and regional category.
According to Morningstar Research the Fund was ranked second out of 34 funds over one year and was top quartile consistently over the last 2 years (as at 31 October 2014).
