The “strong Asia Pacific tailwind” has helped the Martin Currie Asia Pacific Fund to top its sector over the past three years, reports Investment Adviser, but this isn’t just down to lucky timing. It is also one of the few funds to have beaten the MSCI AC Asia Pacific ex-Japan index over the same time period, returning 86.3%. With a concentrated portfolio of 40-60 stocks, its strength is down to “rigorous management and strong conviction on the part of co-fund managers Richard Evans and Jason McCay”.
The fund’s main focus is China, with further large holdings in Hong Kong, Korea and Thailand. McCay and Evans tend to focus on companies displaying strong earnings growth. This has seen them invest mainly in large-cap growth stocks over the past three years. Hence their holdings in heavyweights such as China Mobile, electronics group Samsung and Australian miner BHP Billiton. “The Asian economies are robust and we are still finding strong companies on good valuations,” McCay, an economics graduate from Strathclyde University, tells The Observer.
But despite being named Best Asia Pacific fund for the second year running in the newspaper’s Top Global Funds for 2007 feature last month, it is “not necessarily for widows and orphans”, says Justine Fearns of AWD Chase de Vere in the Daily Mail. There are fears that a US slowdown could hurt the region. But McCay’s co-manager Evans argues that markets are worrying too much about this: “Not enough attention is being paid to how profitable Asian companies are at the moment,” he says.
Martin Currie Asia Pacific fund’s top ten holdings
Name of holding % of assets
Taiwan Semiconductor 6.0%
China Mobile 5.1%
Samsung Electronics 4.1%
QBE Insurance 3.3%
BHP Billiton 3.2%
National Australia Bank 3.1%
United Overseas Bank 3.0%
Hon Hai Precision Industry 3.0%
Kookmin Bank 2.9%
Worleyparsons 2.9%