singapore-based group launches two funds, both domiciled in dublin
Singapore-based APS Asset Management has launched its first two funds for the retail European market, both domiciled in Dublin.
The APS Growth fund is an umbrella structure and will house two sub-funds: the APS Far East Growth and the APS Japan Growth.
The company, which was created in 1995, has assets under management of more than $500m.
Several of its funds have been included in international multi-manager fund programmes run by Northern Trust Global Advisors, Merrill Lynch and Frank Russell.
The Japan Growth fund will invest in equity securities of companies listed on the Tokyo Stock Exchange and the Osaka Stock Exchange. It is benchmarked to the Topix Index.
The Far East Growth fund will invest in equities listed on 11 stock exchanges: Singapore, Bangkok, Jakarta, Kuala Lumpur, Manila, Makati, Shanghai, Shenzhen, Hong Kong, Korea and Taipei. It is benchmarked to the MSCI All Countries Far East ex Japan Index.
The funds are currently available to institutions and high net worth individuals, but APS hopes to make both funds available to a wider retail audience via the Dublin-based funds.
The APS Growth fund is managed by Wong Kok Hoi, who was previously vice-president at Citicorp Investment Management.
He has also worked for the Singapore Investment Corporation and as a consultant to the Monetary Authority of Singapore. The investment strategy used for the fund is through a bottom-up approach. Kok Hoi's philosophy is based on the belief that Asian markets are inherently inefficient and mis-priced securities will eventually be uncovered.
His approach to generating stock ideas is based on three factors. First, he looks at structural and business trends. Themes have included outsourcing and the emergence of China as a cost-competitive manufacturing centre of the world.
Second, he follows company specific leads from personal knowledge, competitors, suppliers, customers and industry experts.
The third source of stock ideas is the use of stock screens. Stocks are screened by country based on parameters such as P/E, price to book value, return on equity and debt-to-equity ratios.
After stocks are short-listed, further company research and visits are undertaken. Company research looks at issues such as entry barriers, cost competitiveness, supply and demand, competency and integrity of the owners, and management. Input from customers, suppliers, competitors and industry experts are also sought.
Stocks are then classified into four categories according to alpha.
Structural alpha refers to companies with long-term structural strengths or core competencies. The belief is that stocks in this category outperform if they are held for three years or more.
Dynamic alpha stocks are those with unstable alphas, such as semi-conductor, plantation, property and airline stocks.
Economic alpha stocks have earnings that grow at pedestrian rates, but are selling at large discounts to intrinsic value.
Opportunistic alpha stocks refer to companies operating under favourable conditions that typically last for up to 12 months.
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