The Asia-Pacific region remains a hot investment area for many fund managers through 2018, and private investors would do well to take note.
An intriguing mix of emerging and more mature markets, we have highlighted a trio of fund opportunities with fantastic long-run returns track records to help navigate the specific regional risks.
These funds are well positioned to take advantage of potential future growth across the Asia-Pacific area with their focus on sectors such as consumer and information technology, and their experienced fund managers who know how to find companies with a strong sense of responsibility towards their shareholders.
Schroder Oriental Income (SOI)
+232%*
This investment trust has delivered outstanding returns for its shareholders thanks to a focus on valuations and a willingness to invest in left-field ideas.
The trust currently makes the most of its Asia-Pacific remit to hold a mix of developed and emerging nations, including Hong Kong, Australia, Taiwan, Singapore, China, South Korea and Thailand. Interestingly, it also has significant stakes in Far East-focused UK-listed stocks, such as banking group HSBC (HSBA) and miner BHP Billiton (BLT).
The income approach adds relative stability to the portfolio, and plays to the total returns demand of the manager and its investors.
First State Greater China Growth (GB0033874321)
+213%*
This fund has consistently delivered positive performance over a long time frame and became so popular at one point that it was forced to close its doors for four years to new investors, re-opening only in February 2016.
The ‘Greater China’ mandate, effectively including Hong Kong and Taiwan too, has helped the fund to be less volatile than some of its peers.
The fund is currently making a hefty play on things like emerging financial services demand and increasing healthcare. But its biggest stakes are in the technology area, where it owns substantial holdings in Taiwan Semiconductor (2330:TW) and Chinese internet giant Tencent (0700:HK).
Stewart Investors Asia Pacific Leaders (GB0033874214)
+158%*
A concentrated way to invest in Asia, around 44% of this fund is invested in more developed markets and 40% in emerging ones. The balance is spread around Australasia, Japan and a sprinkling of US stocks.
It has achieved its outperformance by backing quality, sustainable companies for the long term. A reluctance to over-trade means the portfolio tends to be fairly stable making the fund less volatile than many others. It’s biggest stake right (5.69%) now is Oversea-Chinese Banking Corp (OCBI:SI), listed on the Singapore stock market.
*Performance data 10 years to 21 December 2017
