Not currently rated by Forsyth Partners, the Vontobel Far East Equity Fund has come on our radar due...
Not currently rated by Forsyth Partners, the Vontobel Far East Equity Fund has come on our radar due to its stellar performance. Not only has it been a top performer, among its peer group, in 2004, but the fund has consistently recorded strong performances since the manager Rajiv Jain took over the management of the fund in January 2001, producing positive returns in 2001 and 2002 when the market fell. Jain has put together a strong team and we believe that with his extremely disciplined approach and highly demanding investment criteria the fund should continue to perform well in 2005.
Based in New York, Jain heads up a team made up of four portfolio managers and on trader. Jain has been with Vontobel for over 10 years, having joined the group in November 1994 as an equity analyst and has over 15 years' investment experiences.
Managed on a purely bottom-up philosophy the fund invests in equities and similar securities of companies based in the Far East (ex-Japan). The fund has significant sector and country deviations compared to the index and up to one third of the fund assets may be invested in countries in Oceania. The manager's investment style emphasises quality and valuation with a long-term horizon. In a bid to obtain a high degree of certainty in all investments, the team focuses on business they understand exceedingly well, businesses that are predictable and have a consistent history over a long period of time, at least five years, and most over 10 years. They use an initial screening for quality growth to produce an investible universe of 120-130 companies in the region with compelling economics and very favourable long-term growth prospects. Then the qualitative analysis focuses on comprehensive understanding of each business, its financial reporting and its quality of earnings. As a result the managers do not mind to holding a stock for a long time. Once a price target has been reached and/or there has been a change in the underpinning of the business the manager operates a disciplined approach to selling. Additional risk controls ensure that the fund's focus is on absolute rather than relative value and the manager has a prudent approach limiting single country weightings to 20% over the benchmark(he may also be zero weighted). The portfolio is fairly concentrated and typically features only around 60 names.
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