Funds investing in this region have had a reasonably difficult year, and returns for both small and ...
Funds investing in this region have had a reasonably difficult year, and returns for both small and large-cap sectors were each less than 10%, making this one of the lower performing categories in this analysis. The difference in returns from this year to the last is substantial - particularly in the smaller companies sector where returns dropped from 68% in 2003 to 9% this year. According to Standard & Poor's data, three-year volatility in this category sits at a level of 5.24 and it is interesting to note that many of the best performing funds in the category have lower volatility than this - often the opposite is true as higher returns are often dependent on higher levels of riskiness.
The best performing fund in the sector is categorised in the smaller companies sector, and gained just over 29% in the last year. This is considerably higher than the performance of the next ranked smaller companies fund, which rose by 13.4%. The fund, the AXA Rosenberg Pacific ex-Japan Smaller Companies fund, has been assigned an AA-rating, and Standard & Poor's fund analysts noted in the report that the fund epitomises the group's approach to asset management. The process combines two quantitative models to identify mispriced stocks. In assigning the rating, fund analysts pointed to the disciplined and consistent process that has generated significant outperformance under the tenure of a solid team. The AXA Rosenberg Pacific ex-Japan fund, which invests in large-cap companies in the region, is similarly AA-rated. At the time the report was written, this fund had a diversified portfolio of approximately 130 companies, and had a value bias. The fund uses a similar process to the smaller companies version, and is managed by the same fund manager. During the year to 1 November 2004 it gained 24%, ranking it third in the equity Asia Pacific ex-Japan large-cap sector.
Another of the best performers, the Vontobel Far East Equity fund, is A-rated by Standard & Poor's. In the ratings report for the fund, the investment style is stated as emphasising quality and valuation with a longer-term horizon. The methodology used stresses earnings, balance sheet and management quality, together with attractive valuations. The fund, which is situated in the large-cap sector for this region, gained 22.5% during the year and has significantly outperformed its sector average in two of the last three years; in the other year the fund's returns were in line with the sector. Fund analysts commented that the investment process is thoughtful, coherent and well-articulated and that the strong performance is evidence of the effective use the manager has made of the limited resources available to him.
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation