fund selector asia awards singapore 2020

AWARDS SINGAPORE 2020

FUND SELECTOR ASIA

www.fundselectorasia.com January 2020 Fund Selector Asia Awards Singapore 2

FROM OUR PARTNEREDITOR’S LETTER

MEET THE FSA TEAM

CONTENTSFSA Awards Singapore

Drew WilsonEditor+852 3695 [email protected]

Tom PorterEvent chairperson+65 6692 [email protected]

Gareth WildeManaging director, Asia+852 3695 [email protected]

Nancy QuJournalist+852 3695 [email protected]

Annie EyHead of events, Asia+65 6692 2366 [email protected]

Adeline OonEvents manager+65 6692 2369 [email protected]

David MillsHead of audience development+852 3695 [email protected]

Olivis WongSales Manager+852 3695 [email protected]

Cherry TangDesigner, Asia+852 3695 5202 [email protected]

Francis AcostaDeputy editor+852 3695 [email protected]

Rupert WalkerAssociate editor+852 3695 [email protected]

David CavanaghCommercial director, Asia+852 3695 [email protected]

FE fundinfo is proud to be the official data partner for the 6th Annual Fund Selec-tor Asia Awards held in Hong Kong and

Singapore to celebrate exceptional perfor-mance in Asia’s fund management industry. FE fundinfo’s rigorous quantitative screen-ing process requires each fund to deliver su-perior performance on three key measures: alpha, volatility and consistency over a three-year period before it can make it onto our shortlist. The final winners are chosen by leading fund selectors across Asia-Pacif-ic, with the winners taking home the covet-ed Platinum and Gold awards. Congratula-tions to those that made it onto FE Fundinfo shortlist and to all the 2020 award winners.

Jeff Floro, Sales Director - Asia

The FSA Fund Awards are now in their sixth year, honouring excellence in fund management.

To confirm the methodology of the awards, we’ve back-tested the 56

winning funds from last year and found that the choices by Asia’s fund selectors had an 80% accuracy.

Perhaps that’s why FSA has received increasingly strong participation from the fund selector judges in the six years we’ve held the awards, underscoring their confidence in our independent awards process.

Aside from the funds, we continue with our firm awards – one for excellence in service and one for excellence in product innovation. It is important to emphasise that FSA did not choose the firm award winners. We asked the judges to write in the name of the firm that was a standout in each of these areas in 2019 and then to provide reasons for their choice. Therefore, the awards are truly well-deserved.

We thank the judges for their support and congratulate this year’s winners.

Drew Wilson, editor, Fund Selector Asia


AWARDSPAGE 10

OVERVIEWPAGE 04

04 About FSA/FE Advisory Asia05 Methodology06 Shortlisted funds08 Judges09 Winners

10 Asia Pacific Equity11 Emerging Market Bond12 European Equity13 Global Bond14 Global Emerging Market Equity15 Global Equity16 Greater China/China Equity17 High Yield

18 Japanese Equity19 Mixed Asset20 Regional Bond21 Regional/Single Country EM Equity22 Sector Equity23 US Equity25 Excellence in service26 Excellence in innovation

Publisher Last Word Media Hong Kong, Suite 2003, 20/F Capitol Centre 1, 5-19 Jardine’s Bazaar, Causeway Bay, Hong Kong. www.lastwordmedia.com

This is supplement is published only in a digital version and is distributed exclusively to Last Word’s proprietary database of professional investors.

© Last Word Media (HK) Ltd, 2020. All rights reserved. No part of this publication may be reproduced or transmitted, whether by photocopying or storing in any medium by electronic means or otherwise, without the written permission of the owner of the copyright. The commission of any unauthorised act in relation to this publication may result in civil or criminal actions. Nothing in this publication amounts to a personal recommendation or endorsement. The material contained in this publication is intended for information only and does not constitute the provision of advice. Neither the writers nor the publisher accepts any re-sponsibility for any loss or damage caused by any use of or reliance on the opinions or views expressed in the publication.

Nothing in this publication amounts to a personal recommendation or endorsement. The material contained in this publication is intended for information only and does not constitute the provision of advice. Neither the writers nor the publisher accept any responsibility for any loss or damage caused by any use of or reliance on the opinions or views expressed in the publication.


FSA AWARDS SINGAPORE

ABOUT USABOUT FSA FSA aims to support the investment process by going beyond standard news reporting to provide data, analysis and context – the crucial ‘so what’ and ‘why’, not just the ‘what’. FSA reports on a wide range of issues related to fund selection and portfolio construction, including fund comparisons, investment strategies, macro outlooks, distribution trends and regulatory changes. Our goal is to serve the needs of financial professionals who are ultimately involved in building portfolios for investors.

FSA has the advantage of drawing on the editorial resources of Last Word’s UK-based publications, Portfolio Adviser, International Adviser and Expert Investor, to provide a global context for regional stories.

The timing has never been better. The increasing number of Asia-registered funds, the continuing integration of financial systems in Hong Kong and China, and the shift toward discretionary mandates are among the trends driving quality information demand. We hope that Fund Selector Asia will become the go-to source for industry news, assisting with advisory work and helping fund selectors make better-informed fund-buying decisions.

ABOUT LAST WORD Last Word Media is a financial media company

headquartered in London, with offices in Singapore and Hong Kong.

Since 2005, we have been delivering invaluable insight, news, analysis and inspirational content in print, digital, video, research, data and events to the financial services industry.

Last Word Media is part of Bonhill Group Plc.

ABOUT FE FUNDINFOFE fundinfo was created in 2018 following a merger between investment data,

research and software provider FE, fundinfo, a provider of services for asset managers and distributors in Europe and Asia and F2C, the Luxembourg-based data management firm, which operates the publiFund platform.

FE fundinfo is a global fund data and technology leader. We facilitate better, more efficient investing by connecting fund managers and fund distributors and enabling them to share and act on trusted, insightful information. We provide the data, tools, infrastructure and the expertise required to research, distribute, market and invest in funds and model portfolios.

Why we can helpWe maximise efficiencies for fund managers and fund distributors through

our unique fundinfo.cloud market place, one of the world’s largest information marketplaces for local and international investment funds and support market participants at every stage of the investment lifecycle.• Fund Managers

We help fund managers collate, store and share their fund data – reducing costs and creating operational efficiencies.

We also connect them to an extensive network of fund distributors and media partners helping them increase AUM and brand awareness.We provide the marketplace with comprehensive, accurate information on funds, and help fund managers mitigate risk and remain compliant.• Fund Distributors

We help fund distributors streamline reporting processes and service their clients in the most efficient way.

We also provide them with easy access to high-quality, accurate fund information and help them keep up with regulation and compliance.• Financial Advisers

We also assist financial advisers streamline their investment propositions and research funds

Our Ratings Independent fund ratings trusted by advisers and investors

Our ratings help fund selectors, advisers and investors compare funds. We’re the only ratings provider that evaluates all key performance attributes of a fund.

We look at a fund from all angles, so you can choose how to position your funds to your customers. Our ratings help highlight key features such as fund performance, manager track history, index tracking consistency and best in an asset class.

Contact us in Asia: Hong Kong Office: 21st Floor Central 88, 88-98 Des Voeux Road Central, Hong Kong T: (+852) 3905 1088 Singapore Office: 16 Raffles Quay, Hong Leong Building #33-03, Singapore 048581T: (+65) 3169 2294 For a more detailed methodology, please email Jeff Floro, [email protected]


METHODOLOGYThe FSA Fund Management Awards reward excellence in fund

management, recognising the funds and managers that our independent judging panel feels are most likely to give strong risk-

adjusted returns to their clients in the future. We asked the judges to take a forward-looking view of the performance of the funds that made the shortlist provided by FSA in partnership with FE fundinfo.

This shortlist was put together from a universe of MAS-registered funds that are registered for sale to accredited investors, separated into 14 categories – nine equity, four fixed income and one multi-asset.

FE Fundinfo then applied its Crown Rating methodology using the funds’ alpha, volatility and a measure of the consistency of their performance to allow us to provide the judges with a shortlist of funds for their final nominations.

The fund selector judges were guided by one question: which fund among the shortlist products do you expect to outperform in the next 12 months? The end result is a list of Platinum and Gold winners that best represent the funds that our readers recommend or invest in on behalf of their clients.

For a more detailed methodology, please email Jeff Floro, [email protected]

SHORTLISTED FUNDSAsia Pacific Equity• Fidelity Asia Focus TR• Matthews Asia ex Japan Dividend• Templeton Asian Smaller Companies• JPMorgan Pacific Securities• First State Asian Equity Plus• GAM Star Asia Pacific Equity• Fidelity Asian Smaller Companies• PineBridge Asia ex Japan Small Cap Equity• Eastspring Dragon Peacock• Manulife Asia Value Dividend Equity

Emerging Market Bond• Aberdeen Standard SICAV I Frontier Markets Bond• Pimco GIS Emerging Markets Corporate Bond• Vontobel Emerging Markets Bond• T. Rowe Price Emerging Markets Corporate Bond• M&G Emerging Markets Bond• Nordea 1 Emerging Market Corporate Bond• Franklin Emerging Market Corporate Debt • Aberdeen Standard SICAV I Emerging Markets Corporate Bond• BlackRock GF Emerging Markets Corporate Bond• CS (Lux) Emerging Market Corporate Bond

European Equity• Fidelity European Dynamic Growth• Nordea 1 Nordic Equity Small Cap• Threadneedle (Lux) Pan European Small Cap Opportunities• Russell IC Acadian European Equity UCITS• MFS Meridian European Core Equity• MFS Meridian European Value• BL Equities Europe• Quaero Capital Argonaut• JGF-Jupiter European Growth• Aberdeen Standard SICAV I European Equity Ex UK

Global Bond• Artemis High Income • Pimco GIS Diversified Income • DWS DB Fixed Income Opportunities• Pimco GIS Global Bond Ex US• UBS (Lux) Bond SICAV Global Inflation-linked• Vontobel Bond Global Aggregate

• Threadneedle Dollar Bond• BlackRock GF Global Inflation Linked Bond • H2O Multibonds• Fidelity Global Inflation Linked Bond

Global Emerging Market Equity• HSBC GIF BRIC Equity• BMO Responsible Global Emerging Markets Equity• T. Rowe Price Emerging Markets Value Equity • Fiera Capital Europe Magna New Frontiers • Artemis Global Emerging Markets • FF Emerging Markets Focus• Schroder ISF BRIC (Brazil Russia India China) • BlackRock GF Emerging Markets Equity Income• Schroder Global Emerging Market Opportunities • JOHCM Global Emerging Markets Opportunities

Global Equity• Aberdeen Standard SICAV I World Smaller Companies • Threadneedle (Lux) Global Smaller Companies • Comgest Growth World • Eurizon Equity World Smart Volatility • Artisan Global Equity • Fundsmith Equity Sicav • Morg Stnly Global Brands • Wellington Global Quality Growth • Nikko AM Shenton Global Opportunities • Morg Stnly Global Opportunity

Greater China/China equity• Aberdeen Standard SICAV I China A Share Equity• UBS (Lux) Investment SICAV China A Opportunity• BCM Vitruvius Greater China Equity i• UBS (Lux) Equity Greater China• First State China Growth• Investec All China Equity• Matthews China Dividend • E.I.Sturdza Strategic China Panda USD• First State China Focus• Matthews China Small Companies



High Yield• Janus Henderson Horizon Global High Yield Bond• CS (Lux) High Yield USD Bond • T. Rowe Price Global High Income Bond • Amundi Emerging Markets Corporate High Yield Bond • BlueBay Emerging Market High Yield Corporate Bond • AXA World Funds US Dynamic High Yield Bonds • Morg Stnly US Dollar Short Duration High Yield Bond • Wellington Multi-Sector Credit • NB European High Yield Bond• UBAM Global High Yield Solution AD USD

Japanese Equity• Platinum World Portfolios Japan • Swisscanto (LU) Equity Small & Mid Cap Japan • Polar Capital Japan Value • UOB United Japan Small And Mid Cap • Invesco Japanese Equity Advantage • Baillie Gifford Worldwide Japanese • LionGlobal Japan Growth • GS Japan Equity Partners Portfolio • Melchior ST Japan Advantage • Man GLG Japan CoreAlpha Equity

Mixed Asset• MFS Meridian Prudent Wealth • Janus Henderson Balanced • DWS Premier Select Trust • Capital Group Global Allocation (LUX) • FF Asia Pacific Multi Asset Growth & Income • Pimco GIS Strategic Income • Fidelity Growth & Income • UBS (Lux) Key Selection SICAV China Allocation Opportunity• BL Global Flexible USD • JPMorgan Evergreen

Regional Bond• M&G Optimal Income • GAM Star Credit Opportunities GBP • Pimco GIS Income • Principal GIF Real Estate Debt • LO Asia Value Bond • GAM Star MBS Total Return

• Morg Stnly Euro Strategic Bond • Lloyds High Income • M&G Corporate Bond • BlueBay Investment Grade Bond

Regional/Single Country EM Equity • Lazard Mena • T. Rowe Price Middle East And Africa Equity • JPMorgan Korea • HSBC GIF Turkey Equity • SEB 2 Russia • Manulife India Equity • Nomura India Equity • APS Vietnam Alpha • Fidelity Malaysia • BNY Mellon Brazil Equity

Sector Equity• BlackRock GF World Mining • UBS (Lux) Real Estate Selection Global • JPM US Technology • Phillip Singapore Real Estate Income • Multipartner SICAV RobecoSAM Smart Energy • Quaero Capital Accessible Clean Energy • BlackRock GF World Technology • Variopartner SICAV MIV Global Medtech Fund • Value Partners Health Care • Pictet Nutrition

US Equity• Alger Sicav-Alger Small Cap Focus • Morg Stnly US Growth • Investec American Franchise • Artemis US Select • VAM US Micro Cap Growth • VAM US Small Cap Growth • Artemis US Smaller Companies • JPM America Equity • T. Rowe Price US Large Cap Growth Equity • Morg Stnly US Insight


SHORTLISTED FUNDS


ALPS Advisory

AMG

CA Indosuez Wealth Management

Citi Private Bank Hong Kong

Credit Suisse

Deutsche Bank AG

EFG Asset Management

EFG Bank

FE FundInfo

Finexis Asset Management

Hang Seng Bank

Hong Kong Housing Society

HSBC


JUDGESJUDGESHeads of fund selection and their analyst teams from the following firms* participated in the judging process by voting for the Gold and Platinum Winners from the shortlists:

ICBC

Investment Strategy

JP Morgan Private Bank

Julius Baer

London & Capital Asia

Noah International

Oreana Private Wealth

Purple Asset Management

Julius Baer

Quartermain

TriLake Partners

Vontobel Wealth Management

AWARDS SINGAPORE 2020

FUND SELECTOR ASIA

*Not all firms have been included in this list and have requested anonymity

WINNERSPLATINUM AWARDS

Asia Pacific EquityFidelity Asian Smaller Companies

Emerging Market BondVontobel Emerging Markets Bond

European EquityJGF-Jupiter European Growth

Global BondPimco GIS Diversified Income

Global Emerging Market EquitySchroder Global Emerging MarketOpportunities

Global EquityMorgan Stanley Global Opportunity

Greater China/China EquityFirst State China Growth

High YieldAmundi Emerging Markets CorporateHigh Yield Bond

Japanese EquityBaillie Gifford Worldwide Japanese

Mixed AssetUBS (Lux) Key Selection SICAVChina Allocation Opportunity

Regional BondLO Asia Value Bond

Regional/Single Country Emerging Market EquityLazard Mena

Sector EquityJPM US Technology

US EquityMorgan Stanley US Growth

Excellence in ServiceFidelity Investments

Excellence in InnovationHermes Investment Management

GOLD AWARDS

Asia Pacific EquityTempleton Asian Smaller Companies

Emerging Market BondAberdeen Standard SICAV IEmerging Markets Corporate Bond

European EquityThreadneedle (Lux) Pan EuropeanSmall Cap Opportunities

Global BondH2O Multibonds

Global Emerging Market EquityBlackRock GF Emerging MarketsEquity Income

Global EquityWellington Global Quality Growth

Greater China/China EquityInvestec All China Equity

High YieldJanus Henderson Horizon GlobalHigh Yield Bond

Japanese EquityInvesco Japanese Equity Advantage

Mixed AssetCapital Group Global Allocation (LUX)

Regional BondGAM Star Credit Opportunities GBP

Regional/Single Country Emerging Market Equity BNY Mellon Brazil Equity

Sector EquityQuaero Capital Accessible Clean Energy

US EquityT. Rowe Price US Large Cap Growth Equity

Excellence in ServiceAberdeen Standard Investments

Excellence in InnovationWellington Management



Vikas Chiranewal

AWARD WINNERS

ASIA PACIFIC EQUITYPLATINUM WINNER Fidelity Asian Smaller Companies

GOLD WINNER Templeton Asian Smaller Companies

Templeton Asian Smaller Companies 3 yrs %

Fidelity Asian Smaller Companies 3 yrs %

Nitin Bajaj

When investing in small cap companies, fund manager Vikas Chiranewal avoids those

that have high levels of debt, a move he believes should protect the portfolio in times of volatility. “Governance also stands to be an area of focus for small caps, as generally they have a shorter operating history.” The portfolio is currently positioned to capture three ongoing themes in the region, which are increasing consumer consumption, technology and wellness. One FSA Awards judge wrote that the fund has performed well long-term with low drawdowns, giving it an “attractive risk-reward profile”. LW

Portfolio manager Nitin Bajaj is a value investor. “Do I want to own the best growth companies? I do,

but I am not going to pay up for them,” he says.

Bajaj explained that it is difficult to figure out the longevity of a company’s growth. “For example, the problem

with [smaller] tech companies is that their competitive advantage or moat often times is not very deep. Their mortality rate is much higher than that of a chewing gum business.”

Bajaj therefore prefers companies with simple, steady businesses and not too much innovation. Given the liquidity risks in the small cap space, he prefers to have a diversified portfolio with 100-120 names. He is supported by 45 Asia-focused analysts and six regional analysts dedicated to small-cap companies.

“I leverage on the broader Asia team, not just on the small-cap team, to understand more about the industries we invest in.”

Morningstar points out that small caps are under-researched in Asia and company management may never have met with a fund manager or analyst. “Bajaj makes good use of the vast Fidelity Asia-Pacific resources, which includes five dedicated small-cap analysts in the region.”

The ratings firm added that preservation of capital is crucial, “so Bajaj will focus on buying businesses where he feels there is a significant margin of safety in the price”. LW

DecSepJun Mar ’17 SepJun Dec Mar ’18 Jun Sep Mar ‘19 JunDec

Asia Pac ex Japan Small/Mid Cap (sector average)Fidelity Asian Smaller Companies

010

20

30

40

50

60

70

-50

5

10

15

20

25

30

35

40

Asia Pacific ex Japan Small/Mid Cap (sector average)

Templeton Asian Smaller Companies

Jun Dec Jun ’17 Dec Jun ’18 Jun ’19Dec


EMERGING MARKET BONDPLATINUM WINNER Vontobel Emerging Markets Bond

GOLD WINNER Aberdeen Standard SICAV IEmerging Markets Corporate Bond

Aberdeen Standard SICAV I Emerging Markets Corporate Bond 3 yrs %

Vontobel Emerging Markets Bond 3 yrs %

Luc D’hooge

Fund manager Siddharth Dahiya is supported by a team of 50 EM fixed income analysts and employs

a bottom-up approach. At the same time, he uses top-down risk overlays to see whether the fund is over- or under-exposed to any significant macro-factors. In terms of risks, Dahiya believes that valuations have become less attractive in the EM corporate bond space. However, his outlook on the asset class remains positive, as leverage across EM has gone down and credit defaults have remained low. LW Siddharth Dahiya

Luc D’hooge, who is also the firm’s head of EM bonds, likes cheaper bonds that present long-term

opportunities. “So we do not do fashion trades or jump at hype like other investors may.”

One example of hype was when Gulf countries were included in major

bond indices last year. “You saw many investors at some point buying them early. We wouldn’t play too much with those benchmark inclusions.”

The portfolio is still underweight the Middle East, although he sees pockets of value opportunities in the region. The fund’s biggest overweight is Africa, which accounts for 20% of the portfolio versus 9% of the benchmark index.

“I think some countries are very cheap in Africa. In the past five

years, debt levels have increased to a point that people got nervous and everyone was selling. But you have to be selective.”

One FSA Awards judge says the product is the “outright winner based on performance”, while another believes it has good risk-adjusted yield. LW

Emerging Markets (sector average)Vontobel Emerging Markets Bond

-50

5

10

15

20

25

30

35

40


-5

0

5

10

15

20

Emerging Markets (sector average)

Aberdeen Standard SICAV I Emerging Markets Corporate Bond



AWARD WINNERS

EUROPEAN EQUITYPLATINUM WINNER JGF-Jupiter European Growth

GOLD WINNER Threadneedle (Lux) Pan European Small Cap Opportunities

Threadneedle (Lux) Pan European Small Cap Opportunities 3 yrs %

JGF-Jupiter European Growth 3 yrs %

Mark Nichols

Portfolio manager Philip Dicken likes companies in industries with higher barriers to entry. “We like

companies with pricing power in their products or something that is difficult for competitors to replicate.” However, he noted that these companies should already be well established. “We don’t do early stage businesses.”

Engagement is also an important el-ement in his investment process, given that governance in small caps may not be as good compared with large caps. “So we vote against companies [as a proxy shareholder] quite often.” LW

Europe faces headwinds in 2020, despite the ECB’s loose monetary policy: Growth in the euro area

is expected to be sluggish and trade relationships with the UK post-Brexit need to be negotiated.

But managers Mark Nichols and Mark Heslop, who replaced Alexander

Darwall in 2019, believe that there are a wide range of businesses in the region that derive revenues globally. For example, one holding is premium spirits company Pernod Ricard, which has one brand, Martell, that has also become popular in China.

They like mainly large cap companies that benefit from secular growth and sustainable competitive advantages, such as intellectual capital, brands and proprietary data. The largest holding (7%) is London-

headquartered information services firm Relx.

In terms of sectors, healthcare, industrials and consumer goods make up the largest allocations with each accounting for 20% of the portfolio. The fund is concentrated with 35-45 names and the top 10 holdings make up 55% of assets.

The fund gets five crowns from FE Fundinfo and five stars from Morningstar. Additionally, it won FSA’s Platinum award in both Hong Kong and Singapore this year. LW

Philip Dicken

Europe incl UK (sector average)JGF-Jupiter European Growth

-50

5

10

15

20

25

30

35

40

45


0

10

20

30

40

50

Europe Small/Mid Cap (sector average)

Threadneedle (Lux) Pan European Small Cap Opportunities



GLOBALBONDPLATINUM WINNER Pimco GIS Diversified Income

GOLD WINNER H2O Multibonds

H2O Multibonds 3 yrs %

Pimco GIS Diversified Income 3 yrs %

Eve Tournier

H2O AM CIO Vincent Chailley believes that one of the major risks in the global bond universe

is that inflation is slowly picking up. “In a more inflationary world, QE programmes will get harder to justify for central bankers. The duration of the portfolio was cut down to zero last summer to brace for this less supportive environment.” He is also cautious on corporate credit, which he believes is too crowded. On the flipside, he finds opportunities in local currency bonds. “Some emerging markets offer decent valuations and attractive premiums.” LW

Vincent Chailley

The fund stands out against its peers for three key reasons, according to Eve Tournier, lead portfolio

manager. First, it has had a 15-year track record of consistent, benchmark-beating returns. Second, it can rotate positions in periods of sell-offs to minimize losses. Third, the managers can tap into

the expertise of around 100 in-house credit portfolio managers and 65 credit analysts.

A judge agrees that “Pimco’s key strengths are the depth and quality of its research”, while another notes that the fund is a “solid, multi-year performer”.

Tournier expects that performance to continue, with the fund “well- positioned to deliver high yield-like returns with better downside protection and lower volatility”. She expects a modest global economic recovery this year and

maintains some caution. “Valuations have compressed leaving

little room for negative surprises. As a result, we’re cautious on generic credit beta and instead we’re focused on implementing the best bottom-up ideas, for example in sectors with hard assets and steady cash flows such as real-estate and media.” LW

USD (sector average)Pimco GIS Diversified Income

-5

0

5

10

15

20


-200

20

40

60

80

100

Global (sector average)

H2O Multibonds



AWARD WINNERS

GLOBALEM EQUITYPLATINUM WINNER Schroder Global Emerging Market Opportunities

GOLD WINNER BlackRock GF Emerging MarketsEquity Income

BlackRock GF Emerging Markets Equity Income 3 yrs %

Schroder Global Emerging Market Opportunities 3 yrs %

Nicholas Field

The fund comprises a “mix of quality companies, providing the basis to generate 130% of

the benchmark yield, combined with growth companies helping the fund capture the upside”, says co-manager Stephen Andrews. He is constructive on emerging markets “given the current liquidity improvement”, but is focussed on stock-picking because of challenging fundamentals. His biggest worry is if momentum or low-quality stocks drive markets higher. But he believes the fund “has the ability to weather volatility and outperform over a full market cycle”. LW

Managed by Thomas Wilson and Nicholas Field, the portfolio is concentrated with 40-60

names, according to client portfolio manager for EM equities, Kirsty McLaren.

In general, the managers identify the best companies in preferred countries.

McLaren explained that the firm’s GEM team makes use of a quant model to rank GEM markets from the least to most attractive to guide the managers with country allocation decisions. For example, of the 26 GEMs, seven have standout high scores: Brazil, Greece, Hungary, Poland, Russia, Korea and Turkey. Those seven also have the largest overweights in the portfolio relative to the fund’s benchmark index.

Samsung and Alibaba are the two largest holdings, together accounting

for 13.3% of the portfolio.On the flipside, India has been

ranked as one of the least attractive markets, and therefore is one of the fund’s largest underweights. “India’s domestic economy has continued to slow and valuations are still quite high.”

In addition to fundamental research, the team also integrates ESG factors in its analysis, McLaren added. LW

Emerging Markets (sector average)Schroder Global Emerging Market Opportunities

0

15

30

45

60

75


0

10

20

30

40

50


BlackRock GF Emerging Markets Equity Income


Stephen Andrews


GLOBAL EQUITYPLATINUM WINNER Morgan Stanley Global Opportunity

GOLD WINNER Wellington Global Quality Growth

Wellington Global Quality Growth 3 yrs %

Morgan Stanley Global Opportunity 3 yrs %

The fund, managed by John Boselli, has a “dynamic approach in rotating between quality and growth”, commented one FSA Awards judge. The biggest weighting is information technology (32.6%) with Apple, Microsoft and Alphabet the top three holdings. The risk for the portfolio would be if something triggered a speculative rally. “We tend to underperform in that type of environment”, says Philip Brooks, managing director of investment products and strategies.

He adds that there are four characteristics they look for at the stock level: quality, growth, valuation and total capital return. “In a speculative rally, those characteristics are not rewarded.” LW

The fund – a Platinum winner in both Hong Kong and Singapore – has been in the top quartile of peer

funds over one-, three- and five-year pe-riods, according to FE Fundinfo.

“We continue to focus on bottom-up stock selection and the long-term outlook for companies owned in the

portfolio”, says portfolio manager Kristian Heugh.

The fund consists of what they define as “undervalued, high quality companies with diverse business drivers not tied to any particular market environment”. Information technology leads the sector allocation (31.6% of total net assets) compared to the benchmark (17.15%), followed by consumer discretionary (about 27%), according to the fund factsheet.

Mastercard (7.63%) is the top

holding, way overweight from the benchmark (0.53%). In fact, the fund’s active share – the percentage the portfolio holdings differ from the benchmark – is 93%.

“Our portfolio tends to own companies with low debt and net cash on the balance sheet, which results in companies averaging a 7% net cash-to-equity ratio versus 31% net debt-to equity-ratio of the benchmark,” says Heugh.

“The majority of our alpha is derived from idiosyncratic or non-systematic sources rather than factor allocation,” Heugh says. LW

Kristian Heugh

International (sector average)Morg Stnly Global Opportunity

015

30

45

60

75

90


010

20

30

40

50

60

International (sector average)

Wellington Global Quality Growth


Philip Brooks


quite in debt”, he says. “The US is better, Europe is in recession, China has some of the lowest [economic] indicators it has had in the last twenty years.” But because interest rates are low, markets have not been on a downward trend.

He protects against the downside by ensuring that “every stock that we own is there for a reason, while taking a long-term view of 3-5 years or more, rather than concentrating on current affairs”. LW

Greg Kuhnert

AWARD WINNERS

GREATER CHINA/CHINA EQUITYPLATINUM WINNER First State China Growth

GOLD WINNER Investec All China Equity

Investec All China Equity 3 yrs %

First State China Growth 3 yrs %

Martin Lau

Greg Kuhnert, co-manager, highlights the bottom-up approach of their strategy. The

fund has applied an approach called “4-Factor”, a proprietary method that blends fundamental and behavioural elements to identify interesting stocks. The portfolio has roughly 40% each of A-shares and H-shares. “Among Chinese equities right now, there are companies that have been reporting better-than-expected earnings despite the backdrop of an ongoing trade war and disappointing economic data. With our bottom-up 4-Factor approach, we are able to stock-pick these high quality companies,” he says. LW

The fund gets a five crown rating from FE Fundinfo. From Morningstar it also gets five stars

and a Gold (forward-looking) analyst rating due to “a talented manager, strong investment team, and a time-tested investment process”, the research firm said in a February 2020 report.

Martin Lau, co-manager of the fund, says the emphasis is on quality growth companies. The fund’s plusses, according to Morningstar, include an absolute return focus, low portfolio turnover and benchmark-agnostic approach. “In other words, Lau will avoid index giants such as Alibaba if he has any concerns about their corporate governance,” the research firm said.

Lau says valuations for some stocks “significantly higher that several years ago”, are a risk. Moreover, “the world is

China (sector average)First State China Growth

010

20

30

40

50

60

70

80


0

20

40

60

80

100

China (sector average)

Investec All China Equity



In 2020, risks are on the horizon. “As with any investment in lower-rated credit, the key risks are rising default rates and rising market volatility, which includes changes to the overall interest rate environment, geopolitical risks relating to global trade, rising tensions in the Middle East, and the overall outlook on global commodities,” D’Rosario says.

He expects these topics to continue to drive market sentiment, although the expectation is that rates will stay low. LW

HIGH YIELDPLATINUM WINNER Amundi Emerging Markets Corporate High Yield Bond

GOLD WINNER Janus Henderson Horizon Global High Yield Bond

Janus Henderson Horizon Global High Yield Bond 3 yrs %

Amundi Emerging Markets Corporate High Yield Bond 3 yrs %

Colm D’Rosario

“Our high yield investment process combines top-down asset allocation views with rigorous fundamental

credit research-driven security selection,” says co-manager Tomas Ross.

Decisions are made collaboratively, according to his colleague Seth Meyer, with a “strong co-ownership of risk culture shared by analysts and portfolio managers”. Currently, Ross and Meyer prefer European to US high yield and have an overweight to emerging markets. They expect “flat to small positive excess credit returns” this year, and are wary of geopolitical disruptions. LW Thomas Ross

While debt levels may continue to increase, portfolio manager Colm D’Rosario still believes

that the superior growth and margin potential of many EM credits, coupled with excess bond yields, may result in excess returns for EM high yield debt.

“We have seen this over the last

decade, with returns in emerging market high yield as an asset class being highest in seven of the last ten years versus other US dollar-denominated fixed income asset classes,” he says.

For the measured three-year period, the fund was among the top 10 for the highest alpha (3.17) out of roughly 200 active peer funds, while maintaining less volatility (3.36) than the sector average (4.89), according to FE Fundinfo data.

Emerging Markets (sector average)Amundi Emerging Markets Corporate High Yield Bond

-5

0

5

10

15

20


05

10

15

20

25

30

Global High Yield (sector average)

Janus Henderson Horizon Global High Yield Bond



Tadao Minaguchi

JAPANESE EQUITY

AWARD WINNERS

PLATINUM WINNER Baillie Gifford Worldwide Japanese

GOLD WINNER Invesco Japanese Equity Advantage

Invesco Japanese Equity Advantage 3 yrs %

Baillie Gifford Worldwide Japanese 3 yrs %

Manager Tadao Minaguchi says he identifies companies with “intangi-ble values” such as brand, technolo-

gy and customer loyalty “which are difficult to create or replicate and allow companies to sustain a competitive advantage”, he says.

Morningstar highlighted the novel ap-proach in a recent report. “While there is an element of subjectivity in allocating the worth of each intangible value, the process provides a clear framework on what con-stitutes, and how to quantify, intangible value. We are impressed by the manager’s disciplined approach and differentiated process.”

It awards the fund a five star rating and a Silver (forward-looking) analyst rating.. LW

Defined as benchmark agnostic by the firm’s head of Japan Donald Farquharson, the fund

is “reasonably concentrated”, he says. “We tend to hold companies for a long period.”

Active share is 81%. For the measured three-year period, the fund was among the top three for the highest

alpha (4.38) out of roughly 110 peer funds, though volatility (14.49) was higher than the sector average (12.21), according to FE Fundinfo data.

Currently he is looking at growth sectors such as industrials and technology. He prefers companies with earnings growth above the level of Japan’s GDP to buffer potential risks. Softbank and Sony are the top two holdings and account for about 9% of the fund.

However, over half the portfolio

is invested in family-run businesses, Farquharson says. “The opportunity to invest in these companies is now greater than it was in the past. We think it’s also an advantage that you invest in a company alongside the company’s managers.”

One of his concerns is the Japanese economy. “It seems to be in reasonable shape, but it is still not on a strong footing,” he says. Moreover, a market rally in 2019 – with the benchmark Topix Index up 19.25% for the year – will be hard to beat in 2020. LW

Donald Farquharson

Japan (sector average)Baillie Gi�ord Worldwide Japanese

010

20

30

40

50

60


05

10

15

20

25

30

35

40

Japan (sector average)

Invesco Japanese Equity Advantage



Paul Flynn

MIXED ASSETPLATINUM WINNER UBS (Lux) Key Selection SICAVChina Allocation Opportunity

GOLD WINNER Capital Group Global Allocation (LUX)

Capital Group Global Allocation 3 yrs %

UBS (Lux) Key Selection SICAV China Allocation Opportunity 3 yrs %

Gian Plebani

Paul Flynn, one of three co-manag-ers, reckons the fund is “straight-forward, isn’t too quantitative,

and people understand it”. It is typical-ly split 60% equities and 40% bonds, but the balance can shift at the managers’ discretion. The aim in equal parts is to preserve capital, grow capital and gen-erate income, according to Flynn. He expects slower economic growth this year, so the fund is more conservative than last year. “The biggest risk is an upward re-rating of equities that leaves us behind,” he says. LW

An FSA Awards judge commented that the mixed asset fund is one of the “highest alpha generating

funds” in the asset class. Alpha was second highest at 7.18 out of 48 peer funds for the measured three-year period, according to FE Fundinfo. The portfolio is roughly split between Chinese equities (about 15% onshore)

and Chinese fixed income (8.7% onshore).

The investment team combines a top-down macro view with bottom-up security selection.

“The macro environment would be influential to the fund. We are at the stage when [economic] stabilisation is the priority of the Chinese government”, says portfolio manager Gian Plebani.

The signing of the phase one deal between the US and China

suggests that trade tensions “seem to be contained at the moment”, says Plebani. But he admits that “any unfavourable trade development could be a dominating factor that weighs on China’s economic growth. Pressures are high on China’s economy”.

For Plebani, having a collegiate culture, disciplined investment framework and clear philosophy are key differentiators of the fund. The firm also has a significant local presence in Asia, including China. The fund gets a five crown rating from FE Fundinfo. LW

Balanced (sector average)UBS (Lux) Key Selection SICAV - China Allocation Opportunity (USD)

-50

5

10

15

20

25

30

35

40


-50

5

10

15

20

25

30

Flexible (sector average)

Capital Group Global Allocation (LUX)



REGIONAL BONDPLATINUM WINNER LO Asia Value Bond

GOLD WINNER GAM Star Credit Opportunities GBP

GAM Star Credit Opportunities GBP 3 yrs %

LO Asia Value Bond 3 yrs %

The fund’s objective is to generate income with capital appreciation by investing mainly in investment

grade issuers, corporate and government. Up to 10% of the portfolio can be in emerging markets. The fund’s key feature is diversification in terms of industry and capital structure, according to fund managers Anthony Smouha, Gregoire Mivelaz and Patrick Smouha. Average coupon is 6.54% compared to the 4.18% of the benchmark Barclays Sterling Aggregate Corporate Index, according to the factsheet. The team’s concern for 2020 is that more geopolitical headlines lead to market volatility that ends up impacting bond prices. LW

The long-only bond fund focuses on Asia-Pacific (including Japan) issuers predominantly in US

dollars. China is the biggest country allocation at 27%.

Nearly the whole portfolio is in investment grade bonds, with BBB-rated issuance the biggest allocation at 48%, the factsheet shows. However,

the managers have allowable limits for high yield and non-Asian issuers.

The managers often track the same companies and sovereigns for years before making “sizable investments”, says co-manager Dhiraj Bajaj, who is also head of Asia credit. “This is aligned with us being long-term investors and allocators in the emerging market debt space through cycles.”

In calendar year 2019, the fund’s 18.7% return outperformed the

category average of 8.15%, FE Fundinfo data shows. The fund gets the highest five crown rating from FE Fundinfo and five star rating from Morningstar.

Bajaj thinks that 2020 will bring an “unprecedented global demand” for emerging market credit debt. “We see [economic] growth in emerging markets stabilising and gradually picking up,” he says. LW

AWARD WINNERS

Dhiraj Bajaj

USD (sector average)

-50

5

10

15

20

25

LO Asia Value Bond


-50

5

10

15

20

25

30

Other Currency (sector average)

GAM Star Credit Opportunities GBP


Anthony Smouha


REGIONAL/SINGLECOUNTRY EM EQUITYPLATINUM WINNER Lazard Mena

GOLD WINNER BNY Mellon Brazil Equity

BNY Mellon Brazil Equity 3 yrs %

Lazard Mena 3 yrs %

Rogério Poppe, managing director and the fund’s portfolio manager, believes that a

differentiating factor from peer funds is an investment philosophy based on preservation of capital and income. Following a conservative approach, the team searches for stocks that “look undervalued to their fundamentals, always taking into consideration each business cycle”. To reduce the risk of this long-term approach, they balance the fund with companies in different stages of their business cycles which are also “strong cash flow generators that usually link to significant dividend payments”. LW

“The most important thing is to understand that we are in one of the emerging markets, and we

know they have higher risks, [therefore] we require higher returns,” says fund manager Fadi Al Said.

However, “we focus on self-sustained, well managed businesses,” which helps mitigate downside risk, he adds.

An awards judge concurred, highlighting the a feature of the fund is its “strong downside protection”.

Financials get the largest sector allocation at 20.7%, with Dubai government-owned bank Emirates NBD the top holding at 4.7%. In terms of country exposure, Saudi Arabia and the UAE make up almost half of the portfolio. However, the fund is holding 24% in cash, the December factsheet shows.

Geopolitical risks include the

escalation of US-Iran tensions, which would impact oil prices, Al Said says. The fund’s energy sector exposure has been brought down to underweight at 3.1%.

Having a bottom-up strategy, “we don’t usually get influenced by noise or market events. We tend to be benchmark agnostic,” says Al Said. “In addition, we tend not to be afraid to be contrarian on sectors as long as we believe we can generate returns.” LW

Fadi Al Said


-100

10

20

30

40

50

60

Lazard Mena


010

20

30

40

50

60

70

80

Latin America (sector average)

BNY Mellon Brazil Equity


Rogerio Poppe


Martina Turner

SECTOREQUITY

AWARD WINNERS

PLATINUM WINNER JPM US Technology

GOLD WINNER Quaero Capital Accessible Clean Energy

Quaero Capital Accessible Clean Energy 3 yrs %

JPM US Technology 3 yrs %

Joseph Wilson

Manager Martina Turner tries to identify technologies and companies that will “sustainably

enhance the competitiveness of clean energy versus fossil fuels and make it more accessible to the widest population”, she says. “We target technologies that generate long-term cash flow and have low political risk. We choose management that is visionary and companies that will become global clean energy champions.” Danish power company Orsted and US-based Hannon Armstrong are the top two holdings, together accounting for 15.5% of the portfolio. Turner thinks that the EU Green Deal to reach zero carbon emissions by 2050 “is a game changer”. LW

A Platinum winner in both Hong Kong and Singapore, the fund is “market-cap agnostic”, explains

co-manager Joseph Wilson. “Many of the most interesting opportunities are small- and mid-cap stocks, and so the fund is less concentrated in the big tech names,” he says.

The strategy has delivered “high risk-adjusted returns and alpha”, notes a judge, with a three-year cumulative return of 125.3% during the period reviewed, compared with 61.9% for the category average. For calendar year 2019, it returned 41.25% versus the peer average of 37.65%.

“Stock-picking is largely responsible for the fund’s performance according to our attribution analysis,” says Wilson.

He is positive about the tech sector

this year, and is especially bullish on semiconductor companies which should enjoy an earnings rebound after reducing the high inventories they held at the start of last year. “Semiconductor demand should be robust as inputs for electric and autonomous vehicles, AI processors and for the roll-out of 5G phones,” he says.

Conversely, “the software ecosystem is becoming increasingly competitive”, and the fund is trimming its exposure to the sector. LW

Technology (sector average)

020

40

60

80

100

120

JPM US Technology


-10-5

0

5

10

15

20

25

30

35

Energy (sector average)

Quaero Capital Accessible Clean Energy



Taymour Tamaddon

USEQUITYPLATINUM WINNER Morgan Stanley US Growth

GOLD WINNER T. Rowe Price US Large Cap Growth Equity

T. Rowe Price US Large Cap Growth Equity 3 yrs %

Morgan Stanley US Growth 3 yrs %

Dennis Lynch

Fund manager Taymour Tamaddon searches for “secularly advantaged companies that are able to

capitalize on a changing competitive landscape”, and grow earnings at double-digit rates. A judge notes that “the product is a research analyst best-ideas portfolio”. Tamaddan especially likes companies that are growing free cash flow, which he believes is a reliable predictor of a stock’s future performance. He is positive about the outlook for this year, but is wary of any decline in manufacturing activity. LW

The fund has won FSA awards in the category in both Singapore and Hong Kong. Team leader Dennis

Lynch says that the fund is a “well-diver-sified portfolio of companies that are not tied to a specific market outlook or out-come. We consider both company-specif-ic and portfolio risks in construction and

implementation decisions.”Focused on long-term investments,

his team factors in disruptive change to identify companies that “we believe either benefit from disruption or that are relatively insulated from it”.

The concentrated portfolio has only 38 positions, with Amazon the top position at 6.53% of the portfolio, the factsheet shows. Uber, Spotify and Twitter are also among the top ten holdings. Active share – the percentage the portfolio holdings differ from the benchmark – is 88%.

According to FE Fundinfo, the fund performance ranked fifth out of 71 peer funds over three years and first out of 65 peer funds over five years. It has a four-star rating from Morningstar and four crowns from FE Fundinfo.

For the measured period, out of 208 peer funds, Morgan Stanley US Growth had the highest alpha (10.82) while maintaining low volatility of 11.93, which was far better than the category average (18.37), according to FE Fundinfo data. LW

North America (sector average)

0

20

40

60

80

100

Morg Stnly US Growth


010

20

30

40

50

60

70

80

North America (sector average)

T. Rowe Price US Large Cap Growth Equity


FIRM AWARDS


The FSA Fund Management Awards include an additional category that recognises fund groups. The editorial team did not choose the winners. We asked our fund selector judges to single out firms that had been a standout in 2019 by virtue of two distinguishing factors in asset management – service and innovation.

We provided a free-form question asking for the name of a firm in each category. We also asked to

give examples to justify their choice. FSA totalled up their selections, resulting in a Platinum and Gold winner in each of the two categories – going the extra mile for service and product innovation.

The firm awards, chosen by the fund selectors through a qualitative filter, are therefore a well-deserved vote of confidence.


EXCELLENCE IN SERVICEPLATINUM WINNER Fidelity Investments

An awards judge commented on Fidelity’s “demonstrable excellence in service delivery

for marketing, client support and aftersales” and another wrote “friendly team, very responsive to any type of queries and requests”.

Lawrence Hanson, head of Southeast Asia and the Middle East, says his firm tries to be “brilliant at the basics.

“We make sure we get everything right. Great client service is ultimately about people and culture, and you don’t get a differentiated outcome without it.”

The service team in Asia also asks for feedback from clients, who rate service elements and areas to improve. “We look at service through the client’s eyes, their needs and expectations,” Hanson says.

Fidelity’s institutional and retail service teams support each other and the firm has dedicated teams for private banks in Singapore and Hong Kong, he says.

All elements of service are equally appreciated Asia, Hanson added.

“It’s really about delivering the connectivity across these services. For example, if we’re about to launch a fund with one distribution partner, we need to achieve excellence across the range – events support, sales training, market thought leadership insight, support materials. It’s the package that matters.” LW

GOLD WINNER Aberdeen Standard Investments

Markets generally did well in 2019 and a relatively high percentage of ASI funds also did well, says

Hugh Young, Aberdeen Standard Investment’s head of Asia-Pacific.

But he added that ASI kept continuous communication with clients nonetheless.

“If we are having a bad year, we explain why things are bad and that we’ve done all that we said we would.

“But even in the good years we keep a high level of communication. It’s important to have contact with clients whatever the market environment.”

For example, one judge commented that ASI had a successful product launch “supported by everyone from senior management, PMs, specialists and the local sales & marketing teams”.

Service has many elements – market education, manager visits, sales team availability, training, etc. But Young finds it hard to single out one element that is particularly valued in Asia.

“It can be a straightforward outlook presentation or on another level it can be making sure you get figures to them in 24 hours. But I’d be reluctant to say there is a key thing in Asia in terms of service. It’s about having the whole list of services on offer.” LW

Lawrence Hanson

Young says all major players have similar elements of client service and therefore ASI differentiates by the quality and experience of the team. That’s reflected by comments from awards judges that cited ASI’s service team members as a stand-out among fund groups.

FIRM AWARD WINNERS

Hugh Young


EXCELLENCE IN INNOVATIONPLATINUM WINNER Hermes Investment Management

A lot of ESG funds have been coming into the market. But an awards judge mentioned Hermes’

SDG Engagement Fund as the “first meaningful opportunity for public market investors to make a positive social difference across broad equity markets”.

The fund uses the UN sustainable development goals to decide on the type of impact to focus on.

Another judge says “Their approach to impact investing, one of the better ones that clearly tries to do what it says – not greenwash an existing strategy.”

Jakob Nilsson, executive director and head of business development in Asia-Pacific, believes his firm’s ESG products are differentiated by the investing framework, which he calls ESG 3.0.

The first two versions of ESG investing involved exclusion, then using ESG data for risk mitigation and a source of alpha.

“Our strategies have incorporated those. Now we’re trying to get an above-benchmark return as well as an outcome related to positive societal change,” he says, adding that it’s done through engagement work with investee company management.

In 2020, he believes the ESG trend will move into fixed income, particularly credit.

“People say ESG cannot be effective in fixed income because you’re not a shareholder and do not have influence. We’re seeing that’s no longer the case. A negative ESG score can have an impact on corporates getting debt financing, making it more expensive to borrow.” LW

GOLD WINNER Wellington Management

Wellington launched eight funds in Singapore in 2019 with a wide mix of bond and equity strategies

including the ESG-themed Global Stewards and Enduring Assets.

The firm’s suite of thematic funds was highlighted by several FSA Awards judges.

“Unlike many other AMs who are just creating the latest marketing fads, their thematic products are generally well thought out and managed,” one commented.

Another judge wrote: “A number of companies white label their products which I think is testimony to their strengths.”

110 investment products and strategies specialists who “work with the specific portfolio managers to refine the opportunity set, define risk parameters, and hone in on the competitive edge of the product”.

Ideas come from an initiative with the firm -- “Future Themes” – which aims to “identify the most impactful, provocative, and differentiated investment ideas that will unfold over the next five years”.

This year, Geary expects that investors will continue to seek sustainable and thematic products.

“ESG has become a mainstream concept, and we are increasingly operating in a lower-growth global environment.” LW

Jake Nilsson

Scott Geary, head of the global relationship group in Asia-Pacific, says his firm’s “rigor of research that is required prior to any new investment product development” is what differentiates the product suite.

Wellington, he says, has a team of

Scott Geary

From fund registration to data management and dissemination, we set funds up for success.

FE fundinfo’s propositions are built to better connect and inform the global fund management industry with enriched fund data.

Find out more at fe-fundinfo.com

fund selector asia awards singapore 2020

Documents