Early this week we brought you the favourite Global funds of each category, and on this article, we want to bring you the favourite Asian funds of each category. The information is based on the data provided by the platform Sharing Alpha, who analyses the choices of the European fund selectors and advisers on their platform.
Every month the Sharing Alpha initiative gives us the possibility to know the managers and the funds preferred by the European advisers and selectors. Fund selectors are asked to rate the funds based on their expectations based on three parameters (3 P’s):
- The experience and competitive advantage of the manager and his team (People)
- The costs of the fund (Price)
- The way the strategy is executed in terms of risk management (Portfolio)
|HSBC GIF Asia ex Japan Equity Smlr Coms||Asia (ex-Japan) Equity|
|Baillie Gifford Developed Asia Pac Fd||Asia Equity|
|UBS (Lux) EF Greater China (USD)||Greater China Equity|
|Matthews Asia Fds Asia Credit Opps||Asia Fixed Income|
Baillie Gifford Developed Asia Pac Fd
Iain Campbell, Investment Manager Baillie Gifford
We are ambitious growth investors seeking out companies, wherever they may be, that have a chance of growing to multiples of their current size. We ask what a company can become in 5 or 10 years’ time, and what needs to happen for that journey to unfold.
We engage constructively with companies, encouraging long-term thinking and investing for growth, even in the face of the incessant short-termism of the market.
True long-term investing isn’t easy. Resisting external pressures can be tough, so it’s no coincidence that our firm is a multi-generational private partnership. The 47 partners all work within the firm and have unlimited liability, so our clients’ interests are aligned with ours. We don’t measure success or create targets around AUM or profitability, we measure it by the delivery of meaningful, after costs, outperformance for clients.
Significant wealth creation is, and always has been, the preserve of a tiny fraction of companies with blue-sky opportunities and inspired leadership. Not, for us, seeking ‘market coverage’ or fixating on share prices. We look for real-world opportunities as technology and business models evolve. This means we’re not simply active investors. We’re Actual Investors valuing constant learning, patience and fortitude.
Our Developed Asia Strategy invests in the markets of Japan, Australia, Hong Kong, Singapore and New Zealand. We believe this region has a wealth of compelling opportunities for growth investors for the following reasons: Firstly, the region sits at the heart of Asia where growth is being driven by the rising wealth levels of an expanding middle class, and steady investment in infrastructure. Secondly, countries classified as “Developed” are required to satisfy high standards around the rule of law, corporate governance, financial disclosure, and the treatment of minority shareholders. We believe that investing in countries with these standards is an effective way of managing investment risk. Developed countries also must satisfy certain economic criteria which means they are at a certain level of wealth, which tends to accompany high levels of education leading to a productive workforce, and focus on innovation and investment in R&D. This combination of developed market standards of business and location within a growing pan-Asian region therefore makes Developed Asia an attractive region in which to invest.
The Strategy has a long-term buy and hold, growth investment philosophy. The managers invest in a collection of companies with the following characteristics
- Tailwinds for growth. We look for companies that operate in industries where regional or global megatrends create opportunities for market growth.
- Strong competitive positions. We look for companies that through virtue of their market or technology edge can generate attractive financial returns.
- High calibre management. We look to invest in companies run by strong management teams who are honest, trustworthy, and ambitious for the future of their companies.
We look to take holdings in such companies when they are attractively valued.
In common with other Baillie Gifford Strategies our philosophy and style are unashamedly long term. We believe a long-term approach to investing allows us to take advantage of opportunities that others ignore and stick with the small number of special companies in the region that can generate exceptional returns year over year.
Please note the Developed Asia Strategy is currently available as a UK OEIC and in Europe on a segregated mandate basis.
UBS (Lux) EF Greater China (USD)
Bin Shi, fund manager UBS (Lux) EF Greater China
With heightened uncertainties and new downward pressure, this much is clear: China faces significant risks and challenges both at home and abroad. The economy sharply decelerated in the final quarter of 2021 under “triple pressure”—shrinking demand, supply shocks and weakening sentiment—as well as regulatory crackdown in the property and technology sectors.
We think China’s economy will bottom in the first quarter and be set to recover over the rest of 2022. As the industrial cycle troughs, improvement should become more obvious starting in the second quarter.
And of course, we should also take into account the long-term trends that make China attractive remain, for example, the Chinese government’s commitment to transitioning to a more domestic, service-oriented growth trajectory, increasing spending on healthcare, automation and digitization, and the move towards green energy and a cleaner environment.
However, Policy risk obviously continues to be a significant one. As China’s priority changes to more balanced growth and higher quality of growth, rather than quantity of growth, it will mean a different shape for the economy. Companies are adjusting to the current environment and the process could deliver new winners and losers. All this suggests that China will be one of the defining themes of the coming decades and will offer attractive long-term investment opportunities.
The UBS (Lux) Equity Fund – Greater China offers a way to this investment opportunity. It aims to provide capital growth over a five-year period by investing in the shares of high quality Chinese companies with a strong track record of sustainable growth, with resilience in changing market conditions. Stock selection is carried out through a disciplined investment approach and globally integrated, cutting-edge fundamental research, which seeks to take advantage of opportunities in China’s most attractive potential companies.