China: is the international backlash a worry for investors?
Not so long ago, the West was ‘beating a path to China’s door’ seeking to ride on its coat-tails, as...
In November last year we suspended the Elite Rating from Stewart Investors Asia Pacific Leaders fund (previously branded ‘First State’), due to a change of fund manager.
In January this year, we met with David Gait, the new manager of the fund and existing manager of the Elite Rated Stewart Investors Asia Pacific Sustainability fund.
We had been concerned as to whether he could translate the sustainable investment process from his fund, which invests in small and medium sized companies, to a fund that would invest in larger companies. David has, however, already been co-manager on the fund for six months and will not formally take over the reins until July 2016. During our meeting, he described the management handover as the ‘moving of a clock’, not a sudden and drastic change.
David believes that he will change just three to four underlying holdings in this time out of a total of 55. He see no need for any fundamental change to the fund characteristics, number of holdings or conviction in ideas. Angus Tulloch, the outgoing manager, will still be there to assist and provide research resource where possible.
Looking at Asian markets at the moment, David believes that they could fall further in the short-term. He is negative on the outlook for China, but says that potential is starting to come back, as shares have fallen so much already. Longer-term, over the next 12-24 months, he is more excited about the prospects.
We were very impressed with David and, given the consistent skill he has shown managing the Sustainability fund and the fact that Stewart Investors has a strong team-based approach in this area, we are now happy to reinstate the Elite Rating.