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Why has Aberdeen All Asia confounded Hugh Young to turn Japanese?
by Robert St George on Sep 27, 2013 at 09:18
How performance will change will depend on what becomes of Abenomics. Aberdeen All Asia has beaten the regional index by wide margins over one and three years but, like Japan Growth, has fallen slightly behind of late.
Kwok intends to run the reformed trust along similar lines to his open-ended vehicle.
‘We’ll stick to what we know,’ he said.
It will not be an exact mirror, however. With an all-cap remit it will be weighted a bit more towards smaller and mid-sized companies, and it will have a 20% gearing facility, although Kwok doesn’t plan on ramping up from the current 10% level in the near term.
Yet for his, and Aberdeen’s, approach to shine, Kwok appreciates that the present environment in Japan is not optimal.
‘With my style,’ he said, ‘at certain points in time you will underperform.’
And there are reasons to conclude that Japan’s recent spike is an anomaly, not the new normal. Of Abe’s three arrows of reform, fiscal stimulus cannot last forever, a weaker yen will ultimately hurt what remains an import-dependent economy and liberalisation could hit domestic players as foreign competitors enter the market.
Then there are the nagging doubts about corporate governance, with Young for one complaining that he still struggles to get into AGMs of the Japanese firms he owns.
A final interesting aspect of all this is an observation from the All Asia board that there is a growing desire among wealth managers to make country calls about Asia themselves, rather than leaving them to a broad regional fund.
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