This Asian-focused open-ended investment company (OEIC) targets high conviction selections in the Asia-Pacific region, excluding Japan.
As it stands, the fund holds obligatory Chinese household names Alibaba and Tencent, which tend to dominate the top ten holdings of most Asian Emerging Market OEICs and Unit Trusts, but in particular, interest is peaked by the exposure to the developing Asian-Pacific consumer.
China is transforming itself from a predominately manufacturing-driven economy, to one that is now being taken forward by the consumer, in turn creating a burgeoning middle class.
This shift in growth has not only impacted China but also neighbouring countries across Southeast Asia, whose abundant low cost labour potential is now increasingly targeted by manufacturers looking at alternatives to the trend of rising wages in China.
With manufacturing operations being relocated from China to the rest of Asia, the rise of its middle classes and subsequent consumer demand follows not far behind. This presents significant opportunities for the supply of services and goods demanded by middle class professionals, such as financial services, luxury goods, automobiles and other consumer discretionary items.
This fund provides a balance of exposure to the more established economic development of China through companies such Bank of China, while delivering a foothold in the substantial growth potential of the Philippines, through BDO Unibank, likewise the technology hub of that is South Korea is tapped into with Shinhan Financial Group, and 18 Asia-Pacific markets through the likes of insurance company AIA Group.
The fund size is comparatively smaller than most Asian Equity funds, with assets under management of £50 million. Nevertheless, thus far it has produced returns in excess of the IA Asia Pacfic ex. Japan sector, as well as the benchmark over the five-year period to December-end.