First State Asia Pacific Leaders “an ideal investment”, says Parsons
The Share Centre’s head of investment research claims the fund offers the best of both worlds in that it delivers sector-topping performance while taking on a small amount of risk.
The five crown-rated First State Asia Pacific Leaders
portfolio is the perfect fund for investors looking for exposure in the lucrative Asian region, according to The Share Centre’s Andy Parsons (pictured)
While many analysts are negative on the region as a result of diminishing demand from the West and a slowdown in the Chinese economy, Parsons remains optimistic on its long-term potential, and sees no fund better equipped to benefit than this £5.9bn portfolio.
"We firmly believe that Asia will continue to prosper over the next three to five years as the growing importance of the region and China intensifies," said Parsons, who is head of investment research at the firm.
"In the short-term, much of the media focus has centred on a slowing Chinese economy, but it is the longer term demographic and geographical changes that investors should consider."
"The First State Asia Pacific Leaders fund is an ideal way of investing within this region as its managers and analysts are involved with the participants of these markets on a daily basis."
"The fund has a stellar track record in terms of performance and consistency. It is ranked first quartile on a cumulative basis over five years, three years, one year, six months, three months and the year-to-date."
First State Asia Pacific Leaders has been run by Alistair Thompson and FE Alpha Manager Angus Tulloch
since its launch in 2003. According to FE Analytics
, it is second only to the First State Asia Pacific
fund over this period.
It has returned 283.44 per cent over the period, compared with 177.13 per cent from its sector average, and 170.21 per cent from its MSCI AC Asia Pacific ex Japan benchmark.
Performance of fund vs sector and index since launch
Source: FE Analytics
The fund has a minimum investment of £1,000 and has a total expense ratio (TER) of 1.55 per cent.
As a result of its vast size, First State has begun slowing inflows into the fund, and there is speculation it could soon close to new investors.
It is slightly underweight financials, and its biggest overweight position is in the tech industry, which accounts for 24.60 per cent of its total assets.
Parsons believes the fund's strategy is compatible for investors that wish to make long-term gains and also value stability.
"The fund favours mid and large caps, which are generally held for the longer term, thereby reducing portfolio turnover," he said.
"The managers prefer to invest in companies that have a strong franchise, high barriers to entry, predictable and sustainable earnings growth, financial strength, good corporate governance and that are undervalued."
He added: "Considerations to the broader economic environment and company meetings are also key to their decision-making process."
As well as being a top performer in its sector, First State Asia Pacific Leaders is also one of the least volatile.
According to FE data, since launch it has an annualised score of 17.05 per cent, compared with 19.72 per cent from its sector average, and 20.77 per cent from its benchmark.