Fund manager Michael Watt's today presented the Henderson TR Pacific investment trust interim result...
Fund manager Michael Watt's today presented the Henderson TR Pacific investment trust interim results, and said he was not overly concerned about any possible double-dip recession in the US affecting the fund's portfolio performance.
Instead, Watt said the continued growth expected from China, and the strength of the domestic economies of Korea, Taiwan and Thailand would help returns remain solid.
"Our global strategists believe we are in a stable environment. The US is seen as stable, still getting good figures from consumers despite production data. The capital expenditure picture has stabilised and may even be starting to creep up. The underlying picture is intact."
Additionally, prices for stocks in Asia still remained low by historical standards, and stock markets overall there remain far below their peaks of the early 1990s.
Shares in the fund today fell 2p to 64.25p on the London Stock Exchange after Watt admitted that if the results had finished in July instead of June, the reported figures would have looked significantly different.
The net asset value (NAV) reported for the six months to June was up 4.5% to 82.3p compared to the previous six-month period.
However, including July would have seen the NAV growth drop to around -4% because of the sharp fall in equities values during that month, Watt said.
Today's share price means the fund is trading at a near 7% discount to the NAV of 73.5p announced on Friday.
That is an improvement on the discount of 11.9% announced on the share price and NAV for 30 June, and an indication that investors are still keen on the region.
Watt said the interim figures showing the fund continued to outperform peers was vindication of the investment strategy, although he intends to introduce some changes to avoid the valuation peaks and troughs hit since the mid-1990s.
This was mentioned specifically in relation to 1999, when the fund remained overweight in bonds and cash out of caution and underperformed the benchmark index for about a year before spiking between the last quarter of 1999 to the first quarter of 2000.
Tweaking the investment strategy does not mean the fund will change its commitment to providing investors with capital growth rather than income.
Another change may come about if the fund decides to move into Indonesia, currently a market in which it has no investments.
The Indonesian stock exchange was the best performing one in the region during the past year, and Watt intends to visit the country later this week and next to scope out investment opportunities.
HL and Liberty SIPP slowest
Lifetime and annual allowances
'IFAs bore the brunt'
'Recovery or boom'