Manulife Asset Management (Thailand) (Manulife AM (Thailand)) has announced that its “Manulife Strength - Asian Small Cap Equity FIF” (“MS-ASIAN SM” or “the Fund”) has nearly doubled in assets under management in the first five months of 2014 to THB 4.198 billion, compared to THB 2.353 billion at the end of 20131. As Thailand’s largest FIF (foreight investment fund) investing in Asian equities, the MS-ASIAN SM is a feeder fund that invests in a ‘master fund’, the Manulife Global Fund – Asian Small Cap Equity Fund.
Mr Tor Indhavivadhana, CEO of Manulife AM (Thailand), explained: “The MS-ASIAN SM’s increasing popularity is based on a bottom-up investment strategy that selects small-cap stocks with the potential to outperform the broader markets across market cycles. Despite periods of significant market volatility, the Fund has delivered outperformance versus the benchmark index since its launch. Over one-year, the Fund delivered a net return of 14.00% compared with the benchmark MSCI AC Asia Pacific ex Japan Small Cap Index return of 10.64% in the same period.”2
Since its inception, the Fund has delivered a net return of 70.55%, outperforming its benchmark index by 51.51% percentage points.2
Tor added “The MS-ASIAN SM’s past performance underlines Manulife Asset Mangement’s capabilities in stock selection and efficient portfolio management. A variety of quantitative and qualitative filters are applied to narrow down the field of investable companies. The investment team undertakes a rigorous bottom-up analysis of the individual companies to identify those with the potential to outperform regardless of the marketcycle and macro trends. This consists of identifying those with sustainable growth potential, ample cash flow, trustworthy management teams and defensible competitive advantages.
“Once they believe they have identified a high-potential investment target, they will watch and wait for the right moment to add the stock to the portfolio. Ideally this would be when valuations are attractive due to a short-term company specific factor, an unrelated macro event or simply because other market participants do not yet recognise the growth potential of that particular stock. The objective is seeking to invest in securities with high profitability potential that are selling at relatively low valuations.”
The master fund is managed by Linda Csellak, Head of Asia Pacific Equities at Manulife Asset Management’s Hong Kong office, who has been named “Long-Only Equity Fund Manager of the Year – Small Cap” again earlier this month.3
Commenting on the outlook for Asian small caps, Linda Csellak said “An extended period of market volatility during 2013 left many Asian large cap stocks in select markets trading at significant discounts to small caps and these relatively attractive valuations drew some investors back into the large-cap space in the first quarter of 2014. This created some downward pressure on small caps, particularly in China and Korea, and represented a buying opportunity. We believe our positioning will be rewarded as we expect these companies to report strong earnings in the coming quarters. This trend should be supported by generally robust economic conditions in their home markets, which should be supportive of domestic consumption and investment – in fact, Asia as a whole is forecast to continue to show GDP growth well in excess of that being recorded in developed western markets. This domestic demand should be further supported by the fact that many economies in the region, particularly those in North Asia, are exposed to exports and are well positioned to benefit from continued global economic growth.”
“Apart from North Asia, we have been positive on Indian small cap equities since the fourth quarter of 2013 on the back of low valuations and positive earnings revisions. We remain optimistic and feel the strong election showing by the pro-reform Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) under Narendra Modi will unlock further opportunities in domestic cyclical stocks,” added Csellak.
Tor concluded “The MS-ASIAN SM’s exposure to multiple Asian markets makes it an effective diversification tool in the face of current volatility in the Thai market and remains a potentially valuable part of an investment portfolio that investor should actively consider to include.“
Interested investors can contact Manulife Asset Management (Thailand) directly or through its designated sales agents. For more details, please contact Manulife Asset Management (Thailand)’s Investment Consultant Team at 0-2246-7650 #2.
Mr Tor Indhavivadhana, CEO of Manulife AM (Thailand), explained: “The MS-ASIAN SM’s increasing popularity is based on a bottom-up investment strategy that selects small-cap stocks with the potential to outperform the broader markets across market cycles. Despite periods of significant market volatility, the Fund has delivered outperformance versus the benchmark index since its launch. Over one-year, the Fund delivered a net return of 14.00% compared with the benchmark MSCI AC Asia Pacific ex Japan Small Cap Index return of 10.64% in the same period.”2
Since its inception, the Fund has delivered a net return of 70.55%, outperforming its benchmark index by 51.51% percentage points.2
Tor added “The MS-ASIAN SM’s past performance underlines Manulife Asset Mangement’s capabilities in stock selection and efficient portfolio management. A variety of quantitative and qualitative filters are applied to narrow down the field of investable companies. The investment team undertakes a rigorous bottom-up analysis of the individual companies to identify those with the potential to outperform regardless of the marketcycle and macro trends. This consists of identifying those with sustainable growth potential, ample cash flow, trustworthy management teams and defensible competitive advantages.
“Once they believe they have identified a high-potential investment target, they will watch and wait for the right moment to add the stock to the portfolio. Ideally this would be when valuations are attractive due to a short-term company specific factor, an unrelated macro event or simply because other market participants do not yet recognise the growth potential of that particular stock. The objective is seeking to invest in securities with high profitability potential that are selling at relatively low valuations.”
The master fund is managed by Linda Csellak, Head of Asia Pacific Equities at Manulife Asset Management’s Hong Kong office, who has been named “Long-Only Equity Fund Manager of the Year – Small Cap” again earlier this month.3
Commenting on the outlook for Asian small caps, Linda Csellak said “An extended period of market volatility during 2013 left many Asian large cap stocks in select markets trading at significant discounts to small caps and these relatively attractive valuations drew some investors back into the large-cap space in the first quarter of 2014. This created some downward pressure on small caps, particularly in China and Korea, and represented a buying opportunity. We believe our positioning will be rewarded as we expect these companies to report strong earnings in the coming quarters. This trend should be supported by generally robust economic conditions in their home markets, which should be supportive of domestic consumption and investment – in fact, Asia as a whole is forecast to continue to show GDP growth well in excess of that being recorded in developed western markets. This domestic demand should be further supported by the fact that many economies in the region, particularly those in North Asia, are exposed to exports and are well positioned to benefit from continued global economic growth.”
“Apart from North Asia, we have been positive on Indian small cap equities since the fourth quarter of 2013 on the back of low valuations and positive earnings revisions. We remain optimistic and feel the strong election showing by the pro-reform Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) under Narendra Modi will unlock further opportunities in domestic cyclical stocks,” added Csellak.
Tor concluded “The MS-ASIAN SM’s exposure to multiple Asian markets makes it an effective diversification tool in the face of current volatility in the Thai market and remains a potentially valuable part of an investment portfolio that investor should actively consider to include.“
Interested investors can contact Manulife Asset Management (Thailand) directly or through its designated sales agents. For more details, please contact Manulife Asset Management (Thailand)’s Investment Consultant Team at 0-2246-7650 #2.
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