Asian equities and a change in market sentiment
Over the past few months, markets around the world have witnessed value stocks outperform growth...
Superheroes seem to be proliferating these days. Admittedly I’m not the biggest of comic book readers, but I do enjoy the odd heroic tale involving death-defying adventures, a scary super villain and maybe someone like Hugh Jackman or Chris Hemsworth on hand to save the world when everything falls to pieces.
But in recent years, the cinema world has uncovered a raft of ‘new’ names that were certainly never on my childhood (or adult!) radar. In this context, I guess it’s no surprise that ‘superhero day’ begun trending on Twitter this morning.
So what better way for FundCalibre to join the celebrations than to take a look at some of our Elite Fund manager ‘superheroes’. Here are our five top performing funds for the past ‘superhero year’¹.
With several large American tech firms in the portfolio, this fund’s returns have been boosted by a strong US stock market over the past 12 month. Technology companies have done particularly well, with the NASDAQ index hitting 6,000 for the first time this week. Manager Jeremy Gleeson is a firm believer in investing in ‘new technology’, but via businesses with a strong commercial proposition too.
The Indian stock market is another that has had an excellent run over the past year, but even so Goldman Sachs India Equity Portfolio has beat it, returning 45% versus the market’s 38%². An extensive tax reform bill passed by prime minister Narendra Modi last year provided an uplift in sentiment (albeit the changes won’t be implemented until 1 July this year), while state elections in March strengthened Modi’s reform mandate. The Goldman Sachs team meet hundreds of companies locally each year to find what they consider to be the best opportunities across large, medium and smaller businesses.
Benefitting from the same wave of India enthusiasm, Ashburton India Equity Opportunities has also come out ahead of the market with total returns of 43% over the period. Travelling around India to find hidden gems is integral to the three managers’ process and they talk a lot about the kinds of changes they have witnessed in the country first hand over roughly three decades. This fund stands out for its concentration, investing in no more than 20 to 30 stocks, although well diversified across different industries.
India comprises around 10% of this fund, which also has around a quarter of its total value invested in China and a further 20% in Hong Kong and 12% in Taiwan. South Korea also comprises a decent chunk of the portfolio³. Manager Matthew Dobbs has been running Asian equity funds for more than 20 years and he can also draw on Schroders’ well-resourced regional analyst team for ideas. His blended investment strategy means the fund has held up well in various market conditions.
Japan is now in its fifth year of ‘Abenomics’, the economic reform program kicked off by prime minister Shinzo Abe when he was elected at the end of 2012. Perceptions around its success have been mixed, as Japan continues to struggle with enormous public debt levels, an ageing population and deflation. All the same, a weak yen has helped the Japanese stock market to do well in recent years, as many of its export-focused companies benefit as their products get ‘cheaper’ to overseas buyers. All the same, the Man GLG Japan Core Alpha fund has outperformed the wider stock market by more than 10% in the past year4.
¹ Returns data FE Analytics, total returns in GBP, 28/04/2016–27/04/2017 (National Superhero Day)
² FE Analytics, MSCI India IMI, total returns in GBP, 28/04/2016–27/04/2017
³ Schroder Asian Alpha Plus fact sheet, April 2017
4 FE Analytics, TSE Topix, total returns in GBP, 28/04/2016–27/04/2017