The beta in the Halifax Far Eastern fund has been raised to take advantage of the historically stron...
The beta in the Halifax Far Eastern fund has been raised to take advantage of the historically strong investment period in the region prior to the Chinese New Year.
George Gosden, director of Asian equities at Insight Investments and manager of Halifax Far Eastern, said he has a natural bias against technology stocks in the region but, as part of tactical positioning, he has increased the beta content in the fund.
One such position, making up a large overweight bet, he said, was the fund's holding in a contract manufacturing company, Venture, domiciled in Singapore.
Unlike many of his peers, Gosden is slightly underweight Korea in the fund, with a 10% weighting. He said: 'For a long time I've felt there was too much euphoria over Korea and I've not been surprised to see the recent correction. It is a momentum-driven market, although I do think that fears of a bubble there are overdone.'
Instead Gosden favours Thailand, with one of the largest holdings in his Asia including Japan sector portfolio, Land & Houses, which he said has a strong balance sheet, rising margins and is benefiting from increased domestic demand.
Liquidity is better in Thailand and demand for property has surged, he said, noting that with few players in the property market, Land & Houses has performed well. Gosden said when it comes to stock selection the team at Insight, running both the former Clerical Medical funds and the Halifax-branded portfolios, try to avoid using a dogmatic style and pay a lot of attention to top down factors such as liquidity and global themes.
In the deflationary environment the team, which is based in London, is focusing on companies with attractive and sustainable returns on capital. The team of four make use of Insight's global analysts but also employs external ones to help with company research and to generate big picture ideas and their impact of the region.
Under the Halifax brand, the group runs the Far Eastern fund, International Growth and Japan, while the Insight branded funds for the region include an Asia Pacific portfolio and a Japan fund.
The difference between Gosden's fund and Asia Pacific is that the Insight portfolio is ex-Japan, he said, adding the stock selection process is very similar.
Risk controls are in place across all the portfolios and managers are restricted to plus or minus 2% on stock positions, Gosden said.
His fund is managed similar to a balanced portfolio and uses the local indices as a reference point rather than as a performance and weighting benchmark, for which Gosden uses his peer group.
At the moment the Halifax Far Eastern fund holds 120 stocks and is 30% weighted in Japan.
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