Fidelity's South East Asia fund has reduced its cash weighting from 25.5% to 16% and marginally redu...
Fidelity's South East Asia fund has reduced its cash weighting from 25.5% to 16% and marginally reduced its Hong Kong weighting to 54.3
At the same time the group has slightly increased its holdings in other Asian countries. Taiwan now consists of 7.9% of the portfolio, Singapore has a 7.4% weighting, Malaysia has 4.5%, Thailand has 4.2%, Korea is weighted at 2.3%. Exposure to Australia has been reduced to 1.2
The weightings, which are as of the end of September, highlight the changes in the fund since the snapshot three months previous
In July there was a 25.5% cash weighting, 56.5% in Hong Kong, 4.5% in Singapore, 3.1% in Malaysia, a further 3.1% in Thailand and 1.8% each in Australia, Korea and Taiwan
Fund manager KC Lee continues to show his preference for the Hong Kong region believing it still offers good value
Lee said: "Restructuring and reform are the themes in South East Asia these days. Companies are now paying a lot more attention to balance sheet and cash flow management
"One disappointing area is corporate governance. While there is a lot of talk about improving corporate governance, there is more and more evidence in certain markets, particularly Korea and Malaysia, that corporate governance has not improved
The group believes Southeast Asia is in a growth phase but that the high economic growth seen in some of the region's economies will not be sustainable. This is because the some of the gains have been due to the one off effect of inventory rebuilding
Lee said: "In addition to demand returning, interest rates are likely to edge up and these two together will likely result in slightly lower economic growth
The frAAA rated fund has fallen 14% over the past three months compared with sector average fall of 14.5%. The fund is ranked 37 out of 74 funds in the Far East sector over three months and 44 out of 69 funds over one year. Over one year it has returned 55.3% compared with the average 60.5
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