Henry Cooke's Far East ex Japan fund has reduced its weightings in Singapore and increased its expos...
Henry Cooke's Far East ex Japan fund has reduced its weightings in Singapore and increased its exposure to Taiwan and Malaysia after switching managers.
The Solus Eastern Enterprise Oeic fund was previously run by Adaline Ko at Lloyd George Management but is now being managed by former GT fund managers Lawrence Yip and Christopher Wong. Yip ran the GT Orient fund for six years until 1997 after which he set up a fund management joint venture with Malaysian financial services firm RHB, called RHB Asset Management.
Since taking over the fund, Yip has cut exposure to Singapore from 18% to 8% and has boosted the Taiwan weighting to 19% from 12%. Yip focuses on a contrarian style of fund management, looking to add value where his expectations differ significantly from the market consensus. He has also added to the fund's weighting in Malaysia, increasing the exposure to 7% from 6 6%
Yip said: "One of the things we try to highlight is change which is not discounted by the market. This can be in relation to top down factors or at the sector and stock level. For example, at the moment there is a lot of scepticism towards investing in the Malaysian market.
"We take a very different view. When we look at the fundamental economy we think things are improving and that the market is ignoring the very positive fundamental situation."
Yip added that another positive for Malaysia is that it is set to go back into the MSCI index for the Far East next year. This is likely to mean that demand for Malaysian equities will rise as funds using the MSCI index for the Far East as their benchmark look to return and get exposure to Malaysia.
The fund has boosted its Taiwan weighting more for sector-driven reasons. Yip said that Taiwan is benefiting from the outsourcing of semi-conductor production from the US. He has added Taiwanese electronics firms such as UMC,Winbond, Macronix and Asustek to take advantage of this theme.
Yip is less favourable towards Singapore and has cut holdings in property and conglomerate stocks such as DBS Land, Marco Polo, Semcorp Logistics and Natsteel Electronics.
Yip said: "Singapore has been seen by investors as a safe haven. We believe Singapore is still structurally sound but people like it so much that they have attached too much valuation to the market. There is not much more upside to go for. We are less keen on the Singapore market than our competitors."
Solus Eastern Enterprise's other market holdings include 24% in Hong Kong, 13% in China, 14% in South Korea, 7% in Thailand, 1% in Indonesia and 7% cash. The top 10 holdings make up 41.9% of the portfolio and include China Telecom, HSBC Holdings and Hutchison.
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