Asian ex-Japan Equity Fund

Investment involves risk. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Strategy

Fund Summary

Actively managed and invests mainly in a diversified portfolio of shares of companies in Asia (excluding Japan).

Risks

The following risks are materially relevant to the fund. Please click here to view the definitions of the risks listed below.

Country risk – China
Currency
Emerging markets
Equities
ESG
Geographic concentration
Investment fund
Issuer concentration
Management
Market
Operational
Small/mid cap
Stock Connect
Style

Typical Investor

Investors who plan to invest for the medium to long term, and who:

• are interested in investment growth
• are looking to diversify their equity investments, in particular existing investments in developed markets
• understand and can accept the risks of the fund, including the risks of investing in emerging markets

30-Jun-2022 - Anh Lu, Portfolio Manager,

We purchased shares of Tingyi (Cayman), an attractively valued food and beverage maker whose margins we think can benefit from a potential normalization of raw material costs beyond 2022 as well as an improving competitive environment within the instant noodle industry. We think it may be able to sustain a high single-digit dividend yield over the next three to four years. Aside from its rich dividend yield, its beverage price hikes can potentially be a positive catalyst for the stock.
We took advantage of share price weakness and bought shares of Tsingtao Brewery. We believe that the market underappreciates the brewer's premium portfolio and the product momentum driven by increasing interest in domestic brands. We think that the company will continue to benefit from the premiumization trend and pricing discipline.
Samsung Electronics is one of the world's largest memory chip makers. We sold some shares of the company and remain underweight relative to the benchmark as we believe there will be better memory margin stability from 2023 following the sector's downturn.
We bought shares of HDFC Life Insurance, a high-quality insurer that is taking market share in an under-penetrated market, thanks to strong execution and solid branding. We think it has one of the best track records among private insurers with a balanced product mix and distribution capability. The insurer will likely benefit from the secular shift towards higher margin, protection-based product.
ICICI Bank is a private Indian lender. We bought shares of the company as we think it is well-positioned to accelerate loan growth and gain market share as it has addressed its asset quality issues.
We took advantage of share price weakness to buy Ping An Insurance as the Chinese life insurer may benefit from the easing of COVID-19 restrictions. We think there is still substantial market opportunity in health insurance in China. The focus of policymakers towards growth should also be supportive of the sector.
We bought shares in Sungrow Power Supply, one of the world's largest solar and wind inverters suppliers, which gets half of its revenue from China and the other half from overseas. In our view, the company will likely gain from the potential increase in solar installation demand following President Biden's decision in June to waive tariffs on solar panels from four Southeast Asian nations where U.S. utility operators traditionally source their solar modules.
Zhejiang Hangke Tech is a lithium battery back-end equipment supplier. We purchased shares in the company because we believe it will likely benefit from margin recovery, driven by the strong capital expenditure cycle ahead in the global lithium battery industry. Major lithium battery manufacturers have announced capacity expansions driven by strong demand from electric vehicles (EV) and energy storage systems.� Hangke's order backlog acceleration and margin recovery will likely be driven by the capex cycle of Korean battery makers, which are among its major clients.
Zhejiang Sanhua is a maker of thermal management components used in home appliances and automobiles. We bought shares because we believe the company will benefit from rising EV penetration.
We bought shares of Hongkong Land, which owns and manages prime commercial properties in the Central Business District of Hong Kong, due to its attractive valuations and the potential return of demand should borders reopen. Hongkong Land is part of the cash-rich Jardine Group which has a lot of room to increase dividends and buybacks, in our view. We picked Hongkong Land as the company appears most committed to capital management going forward.

30-Jun-2022 - Anh Lu, Portfolio Manager,

KE Holdings, an integrated online and offline platform for housing transactions, was a key contributor as it delivered consensus-beating first-quarter results. We believe KE Holdings will benefit from the potential recovery of the property cycle in the second half.
Shares of Meituan, a food delivery platform, rose on better-than-expected results in the first quarter and encouraging food delivery margin guidance for the second quarter. We believe Meituan has better growth prospects than others in the e-commerce space. It is a beneficiary of a COVID-off environment, and we think that Meituan's core growth engines, its in-store business and food delivery, are robust but underappreciated.
Li Auto, a maker of electric vehicles, was among the key contributors as its shares reached a record high following the unveiling of its new smart sport utility vehicle (SUV) which received strong orders from customers. The successful launch demonstrates the auto maker's strong execution from product definition, supply chain management to marketing. We view the stock as an attractive idiosyncratic opportunity with a good setup for the next 18 months as it launches another three new products. We think it has the potential to become a leading EV original equipment manufacturer (OEM) in China.
Shares of H World, formerly known as Huazhu and one of the top hotel chain operators and franchisors in China, recorded solid gains as it is seen to benefit from the return of inter-provincial travel with easing COVID restrictions.
Shares of Naver, a South Korean search engine, fell following substantial gains in the last three years. Concerns about margin compression and the growth of the e-commerce market as the impact of COVID-19 abates weighed on the stock. We think Naver's fundamentals remain solid, and we view it as an earnings compounder.
Sea Limited, an internet platform company, held back fund performance. Its shares reflected mixed first-quarter results that showed weaker-than-expected game cash revenues and margins while e-commerce and fintech were in line with expectations.

Disclosure on Vendor Indices can be found here.