In focus
48 / 49
Trust pick
Asia & emerging markets
While Edelsten has been cutting
back in the US, he has been upping
his weighting to Asia, which now
stands at around 25 per cent of his
portfolio. Much of this is in Japanese
companies, accounting for 17 per cent
of the portfolio, compared with 6 per
cent for the benchmark.
“With parts of China and Japan set
to reopen, this is a dramatic difference
compared with the US and Europe,”
the manager explains.
In selling the US in favour of Japan,
he says he is buying shares that are
“considerably” cheaper.
“The slide in markets has certainly
meant companies are a lot cheaper
than they were,” adds Hugh Young,
manager of the Aberdeen Standard
Asia Focus trust. “However during my
30-year career I’ve learnt not to focus
solely on the price.
“We’ve identified opportunities
around the region where share prices
are attractive and the management,
balance sheet strength and business
model are also compelling.
“Importantly, they’re in good shape
to weather the challenges ahead and
capitalise on opportunities.”
Edelsten went into the crisis light
in emerging markets as he couldn’t
find much value, a stance he has
maintained.
“Some emerging markets are going
to find this very hard indeed,” he
adds. “Places like India and Brazil are
going to prove difficult to lock down.”
PERFORMANCE OF TRUSTS VS INDEX
Name
1yr (%)
3yr (%)
[ SECTOR PROFILE ]
5yr (%)
10yr (%)
Scottish Mortgage 12.7 59.68 123.51 434.22
Fidelity European Values 0.27 22.26 38.51 140.71
Pacific Assets -25.87 -10.19 5.56 98.39
Schroder Income Growth -20.17 -13.64 -4.51 81.63
MSCI World -5.83 6.77 40.45 131.19
Pacific
Assets
Pacific Assets is Lowcock’s
trust pick for this area,
which he says is because
more than half of the
portfolio is invested in
emerging Asia. “The
managers have a clear,
robust and differentiated
investment approach,” he
adds. “They seek 30 to 60
stocks capable of delivering
sustainable and predictable
growth through their
pricing power, franchise
strength, and limited
regulatory oversight, though
management integrity is of
utmost importance.”
The trust is up 5.56 per cent
over five years, compared
with 25.96 per cent from its
IT Asia Pacific sector. It is on
a discount of 7.96 per cent,
which is significantly wider
than its one- and three-year
averages.
Source: FE Analytics
TRUSTNET
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