The story of most markets in the decade or so before the start of last year was growth ’ s outperformance over value , but this wasn ’ t the case in every area . Asian smaller companies was one sector where there was little to choose between the two styles – until the start of 2022 , that is , when the gap opened in value ’ s favour . One manager who took full advantage of this trend is Nitin Bajaj . The manager ’ s
Fidelity Asian Values trust is up 180.8 % over the past decade , compared with gains of 78 % from its MSCI All Country Asia ex Japan Small Cap benchmark and 52.6 % from its IT Asia Pacific Smaller Companies sector . However , Catherine Yeung , investment director at Fidelity , pointed out the outperformance of value comes with a caveat . “ Value investing in Asia isn ’ t the same as value investing in places like the UK or the US ,” she explained . “ Bajaj finds opportunities across all industries at all points in the cycle , and the quality of the company and the return on equity are usually a lot higher than those of the index . “ The return on equity is currently only at a slight premium to the index , but that ’ s because of the trust ’ s exposure to Chinese companies affected by issues in the property market and extended lockdowns .” Unlike many value managers in the West who start their process by screening for the cheapest companies in the market , Yeung said Bajaj always begins by asking “ is this a good business ?” “ This means , does it have a product or service that can grow ? Or is it a hyped-up blue-sky scenario ? “ We really need to understand the DNA of a company and address the question of whether the management
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