Invesco Asia is starting to reduce its 15% cash position because its fund manager Alfred Ho believes...
Invesco Asia is starting to reduce its 15% cash position because its fund manager Alfred Ho believes valuations in the market are looking attractive.
The trust is one of only a few in the Far East ex-Japan sector which has recorded positive returns, at 3.6%, over the past three months to 21 March.
William Proudfoot, managing director of specialist funds at Invesco, has put the performance down to Ho's market timing of cash levels and his defensive portfolio.
Ho is optimistic that valuations for key stocks and sectors have reached acceptable and attractive levels, and he believes that, in the next quarter in particular, Asia will remain prone to bouts of global weakness. The start of the year has been good to the Asian markets, Proudfoot said.
He noted that on a three-month view, the average Far East Asian investment trust is at a good level and performance has not fallen off. He said: "In this period, Asian Markets have outperformed the US and Europe."
Over the fourth quarter of 2000, Invesco Asia struggled due to its exposure to Korea and Taiwan and the trust's slow reactions to events in those regions but during January and February Ho's defensive stance has benefited the portfolio.
One of the trust's key holdings, MTR, Hong Kong's equivalent of the underground, performed well in this period, Proudfoot said. He added that Ho was canny in his market timing.
By reducing stock exposure at the end of January, Ho was able to collect the profits of what has been the strongest month so far this year.
Through February and into March he continued to hold cash and while he is now drip-feeding some cash back into the market, he readily admits to being in no hurry to be fully invested.
Ho said that he retains strong technology, media and telecoms exposure, which makes up 35% of the portfolio, with an overweight position in D-Ram stocks such as Samsung Electronics, which he believes will not be badly affected by corporate governance concerns.
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