Star Tracker: revisiting Asia Pacific’s most consistent managers

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In the world of Asia Pacific equities, a lot has happened in the past two years, with stresses and strains emerging in the Chinese growth story and emerging Asia becoming a more recognised force.

Against this backdrop, Citywire Global has rewound to October 2010 and looked at the fund managers we pinpointed as posting the most consistent outperformance in the Asia Pacific ex Japan equity sector.

In the previous analysis we found four fund managers who had been able to deliver above average performance in each of the five years between 2005 and 2010.

Table of most consistent Equity Asia Pacific ex Japan (October 2005-October 2010)

Fund Manager Contributing Fund(s)
Hiroshi Yoh Tokio Marine Fund-Far East Equity Portfolio/Nordea 1 - Far Eastern Equity Fund
Greg Kuhnert Investec Asia ex Japan A Acc Net
Joseph Tse Fidelity Funds - Asian Special Situations
Ben Surtees Jupiter JGF Asia Pacific

Fund managers

Chops and changes have taken place among these four managers in the intervening two years. The most notable change has seen Yoh, who was running the Tokio Marine Fund-Far East Equity Portfolio and the Nordea 1 – Far Eastern Equity Fund, join Janus Capital.

He was handed the Janus Asia equity fund in August 2011 and, in August of this year, he was added to the firm’s Emerging Markets fund alongside Euro Stars AA-rated manager Wahid Chammas.

Meanwhile, the other manager to have ceased running his fund is Fidelity’s Joseph Tse. Tse opted to step down from large-scale fund management in August, which saw him hand over the two strategies under his control.

This saw the $406 million Fidelity Funds – Greater China fund handed to Raymond Ma and the Fidelity Funds – Asian Special Situations fund come under the control of Suranjan Mukherjee.

That does, however, leave two managers who have retained their respective funds in the intervening period, so how have they performed?

Ben Surtees

Fund: Jupiter JGF Asia Pacific

Total returns (October 2010-October 2012): -2%

Benchmark performance (October 2010-October 2012): 8.6% (FTSE World Asia Pacific ex Japan TR USD)

Recognised for his outperformance at the helm of the $30 million fund, Surtees has underperformed his Citywire benchmark in the two years since the previous analysis. In his 60-stock portfolio, Surtees has concentrated on Hong Kong and Chinese names, with this market making up 34% of his geographic exposure.

This compares to a 13% exposure to Korea and 10% in Thailand. But, in his most recent market commentary, the formerly Citywire A-rated manager said uncertainty caused in the Asian markets by rumblings in the western world presents attractive entry points for long-term investors.

He anticipates a smooth transition of power in China and also growth to remain robust in nascent markets such as Indonesia (5.11%) and the Philippines (5.16%).

Greg Kuhnert

Fund: Investec Asia ex Japan A Acc Net

Total returns (October 2010-October 2012): 0.7%

Benchmark performance (October 2010-October 2012): 8.6% (FTSE World Asia Pacific ex Japan TR USD)

Kuhnert is rarity in this analysis review, as he remains in charge of his $192 million fund and has also ended the two-year period with a positive return. This is however, still 7.9% below the benchmark.

Nearing a decade in charge of the asset management firm’s Asia Pacific portfolios, Kuhnert has founded his approach on a strong allocation to the Chinese growth story. Exposure to this market currently makes up 31% of his allocation by country.

It appears Kuhnert is trying to capture cyclical trends, with a 4% overweight to the automotives sector, as well as slight overweights in relatively defensive areas such as banking and the energy sector. He also remains bullish on the long-term story of smaller economies, such as Taiwan, Thailand and Singapore.