We have added M&G Asian to our Recommended list.

Fund Snapshot

An Asia Pacific ex Japan equity fund managed according to a bottom-up approach that relies upon deep company research on a curated universe of stocks.  The managers look to understand why conventional wisdom may be wrong, in doing so seeking to invest in companies that are priced at a discount to their true worth.  Within its sector, the fund features in our ‘Larger-Cap, Value-Biased’ category.

Fund Highlights

• Lead manager, Dave Perrett, runs the fund alongside Carl Vine, deputy manager. They have been investing in Asian and developing markets for many years and through different market cycles. Messrs Perrett and Vine joined M&G in 2019 and are Co-Heads of Asia Pacific Equities.  Before M&G, they co-founded the boutique investment firm, Port Meadow Capital Management, in 2014.
• Their approach has been honed over their careers, and they draw great benefit from their accumulated knowledge.
• The team applies fundamental and qualitative analysis to assess and identify investment ideas, focusing on company quality, industry trends, valuation and understanding the risks of ownership of a business.
• The fund is set apart by the managers’ thoughtful approach to handling the ‘investment problem’, their dedication to maintaining and building upon their company knowledge and their holistic consideration of risk.

Key Characteristics and Expected Outcome

• Deep company knowledge, incorporating careful valuation analysis, is at the heart of the approach. They look for situations where a specific debate or controversy has driven a large wedge between a share price and their estimate of fair value.
• Using this bottom-up process, the team is willing to take meaningful differentiated positions, where they see significant upside.
• That said, the marginal impact of each investment upon the fund’s aggregate risk profile is considered carefully. There is an array of other risk controls, including a margin of safety requirement, before they initiate a new investment.
• Given the value-orientated nature of the approach, the fund is more likely to fare well in markets when sound fundamentals and attractive valuations are favoured. Momentum-driven and/or highly speculative markets resulting in the rapid re-rating of stock prices tend to be challenging for the strategy.
• As the value style skew is relatively modest through time, the fund can be used as a mainstay Asian ex Japan equity holding for long-term investors. Investors who are concerned about shorter-run outcomes versus the benchmark should consider pairing it with a passive vehicle or blending it with a growth-orientated offering.

To view our factsheet, please visit the fund page on our website.