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Sector watch: Asia Pacific managers feel the heat

Concerns over rising inflation in China coupled with weak property stocks in Hong Kong have contributed to a turbulent 12 months for fund managers in the Asia Pacific ex Japan region.

 
Sector watch: Asia Pacific managers feel the heat

The average manager in the Asia Pacific ex Japan sector has seen a loss of 6.16% over the twelve months to the end of June, a massive drop compared to the same time period last year when the average manager returned a stellar 37.68%.

Rising inflationary concerns in China have had an adverse effect on holdings while Hong Kong’s property stocks have also been weak.

Old Mutual’s Suresh Sadasivan topped the sector returning 5.84% on his Old Mutual Asian Select Acc fund over the review period while Baillie Gifford’s Citywire A-rated Harvey Hammonds followed closely behind with returns of 5.70% on his Baillie Gifford Developed Asia Pacific A Acc product.

AA-rated Martin Lau, manager of the First State Greater China Growth A  fund, was third in the tables with returns of 4.90%.

Lau (above) acknowledged the weakness of Greater China markets on the back of rising inflationary concerns and said China A-shares had continued to fall steeply as investors became increasingly concerned about slowing earnings momentum.

He remains positive on the long-term outlook for Taiwan although he feels the market may have become too optimistic in the short-term.

Lau said: ‘The fund’s performance was helped by Xinao Gas and Chunghwa Telecom as both stood their ground in a falling market.'

Property developer Cheung Kong contributed negatively on concerns about rising interest rates. Quality companies should emerge stronger from these difficult times and we will add to our favourite names as valuations become attractive.’

He recently bought into China BlueChemical on hopes of consolidation in the Chinese fertilizer industry and sold out of Acer, Huaku Development and Parkson Retail, taking profits as they reached valuation targets.

Elsewhere Angus Tulloch, who manages the First State Asia Pacific A , First State Asia Pacific Sustainability A  and  First State Asia Pacific Leaders A funds, returned 3.68% over his mandates while Investec’s Greg Kuhnert also managed to stay in the black with returns of 2.05% on his Investec Asia ex Japan A Acc Net  vehicle.

Melchior’s Henrietta Luk is lagging seriously behind her peers however.

She saw a loss of 38.49% on her Asian Opportunities fund over the review period, a stark contrast to the 48.42% returns she produced over the same time frame last year.

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  • Old Mutual Asian Select Acc
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  • Baillie Gifford Developed Asia Pacific A Acc
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  • First State Greater China Growth A
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  • First State Asia Pacific A
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  • First State Asia Pacific Sustainability A
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  • First State Asia Pacific Leaders A
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  • Investec Asia ex Japan A Acc Net
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Look up the fund managers

  • Suresh Sadasivan
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  • Harvey Hammonds
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  • Martin Lau
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  • Angus Tulloch
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  • Greg Kuhnert
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  • Henrietta Luk
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