EDITOR’S LETTER · recommendation or endorsement. The material contained in this publication is intended for information only and does not constitute the provision of advice. Neither

www.fundselectorasia.com January 2019 Fund Selector Asia Awards Hong Kong 2

FROM OUR PARTNEREDITOR’S LETTER

CONTENTSFSA Awards Hong Kong

FE Advisory is proud to be again the of-ficial data partner for the 5th Annual Fund Selector Asia Awards held in Hong

Kong and Singapore to celebrate exception-al performance in Asia’s fund management industry. FE’s rigorous quantitative screen-ing process requires each fund to deliver su-perior performance on three key measures: alpha, volatility and consistency over a three-year period before it can make it onto our shortlist. The final winners are chosen by leading fund selectors across Asia-Pa-cific, with the winners taking home the coveted Platinum and Gold awards. Con-gratulations to those that made it onto FE shortlist and to all the 2019 award winners.

Michael Li, head of FE Asia business

MEET THE FSA TEAM

In this awards supplement, Fund Selector Asia showcases the winners of our fifth annual fund awards honouring excellence in fund management. We also have two fund group awards –

one for excellence in service and one for excellence in product innovation.

After studying the market, our editorial team decided to single

out these two crucial elements of asset management. It is import-ant to emphasise that FSA did not choose the firm award winners. We asked the judges to write in the name of the firm that was a standout in each of these areas in 2019 and then to provide reasons for their choice. Therefore, the awards are truly well-deserved.

FSA has also received increasingly strong participation from

the fund selector judges in the five years we’ve held the awards, underscoring their confidence in our independent awards pro-cess. We have two separate panels of judges for Hong Kong and Singapore and we thank them for their ongoing support, while saying congratulations to the winners.

Drew Wilson, editor, Fund Selector Asia

Drew WilsonEditor+852 3695 [email protected]

Tom PorterManaging director, Asia+65 6692 [email protected]

Gareth WildeDirector, business development, Asia+852 3695 [email protected]

Flora LeungBusiness development,sales support and admin manager+852 3695 [email protected]

Annie EyHead of events, Asia+65 6692 2366 [email protected]

Adeline OonEvent executive+65 6692 2369 [email protected]

David MillsHead of audience development+852 3695 [email protected]

Jennifer ChanDesigner, Asia+852 3695 5202 [email protected]

Francis AcostaSenior journalist+852 3695 [email protected]

Rupert WalkerHead of research, Asia+852 3695 [email protected]

Olivis WongSales Manager+852 3695 [email protected]


AWARDSPAGE 10

OVERVIEWPAGE 04

04 About FSA/FE Advisory Asia05 Methodology06 Shortlisted funds08 Judges09 Winners

10 Asia Pacific Equity11 Emerging Market Bond12 European Equity13 Global Bond14 Global Emerging Market Equity15 Global Equity16 Greater China/China Equity17 High Yield

18 Japanese Equity19 Mixed Asset20 Regional Bond21 Regional/Single Country EM Equity22 Sector Equity23 US Equity25 Excellence in service26 Excellence in innovation

Publisher Last Word Media Hong Kong, Suite 2003, 20/F Capitol Centre 1, 5-19 Jardine’s Bazaar, Causeway Bay, Hong Kong. www.lastwordmedia.com

This is supplement is published only in a digital version and is distributed exclusively to Last Word’s proprietary database of professional investors.

© Last Word Media (HK) Ltd, 2019. All rights reserved. No part of this publication may be reproduced or transmitted, whether by photocopying or storing in any medium by electronic means or otherwise, without the written permission of the owner of the copyright. The commission of any unauthorised act in relation to this publication may result in civil or criminal actions. Nothing in this publication amounts to a personal recommendation or endorsement. The material contained in this publication is intended for information only and does not constitute the provision of advice. Neither the writers nor the publisher accepts any re-sponsibility for any loss or damage caused by any use of or reliance on the opinions or views expressed in the publication.

Nothing in this publication amounts to a personal recommendation or endorsement. The material contained in this publication is intended for information only and does not constitute the provision of advice. Neither the writers nor the publisher accept any responsibility for any loss or damage caused by any use of or reliance on the opinions or views expressed in the publication.


FSA AWARDS HONG KONG

ABOUT USABOUT FSA FSA aims to support the investment process by going beyond standard news reporting to provide data, analysis and context – the crucial ‘so what’ and ‘why’, not just the ‘what’. FSA reports on a wide range of issues related to fund selection and portfolio construction, including fund comparisons, investment strategies, macro outlooks, distribution trends and regulatory changes. Our goal is to serve the needs of financial professionals who are ultimately involved in building portfolios for investors.

FSA has the advantage of drawing on the editorial resources of Last Word’s UK-based publications, Portfolio Adviser, International Adviser and Expert Investor, to provide a global context for regional stories.

The timing has never been better. The increasing number of Asia-registered funds, the continuing integration of financial systems in Hong Kong and China, and the shift toward discretionary mandates are among the trends driving quality information demand. We hope that Fund Selector Asia will become the go-to source for industry news, assisting with advisory work and helping fund selectors make better-informed fund-buying decisions.

ABOUT LAST WORD Last Word is a privately-owned, independent financial media company headquartered in London with offices in Singapore and Hong Kong. Last Word was launched in 2005 with the aim of producing magazines, websites and running forums for the quality end of the wealth management market.

ABOUT FE ADVISORY ASIAFE Advisory Asia Limited (FEAAL) was formed in Hong Kong in 2013 and granted a Type 4 licence (Advising on Securities) by the Hong Kong Securities and Futures Commission (HK SFC) in March 2015. FEAAL is a group company of Financial Express (Holdings) Limited (FEH), England. A global leader in the provision of investment fund data and analytical solutions, FEH was founded in 1996 and is headquartered in London, with regional offices in Hong Kong, Singapore, India and Sydney.

Why we can helpWe are a fund advisory firm for professional clients, providing guidance to top-tier financial advisers, asset managers, banks and life insurance companies. We take on the regulatory burden so you can focus on growing your business and strengthening relationships with your clients.

Our team of analysts based in Hong Kong and London are bound by a strict professional code of conduct to ensure the integrity of our rigorous, independent and actionable investment processes is never compromised.

Our servicesl FE Advisory 100 The top 100 funds, selected from the HK SFC fund universe (approximately 1,900 funds) and across the full spectrum of asset classes and sectors. These funds have undergone our rigorous quantitative and qualitative due-diligence process.

l FE portfolios The model portfolio services construct portfolios using a proprietary investment process and comprise funds that have been selected from the FE Advisory 100 list. We offer both standard and bespoke model portfolio services. We offer three standard model portfolios to suit the risk profiles of individual investors: cautious, balanced and growth, typically comprised of eight funds and rebalanced twice yearly.

For clients who demand a more customised service, we can help construct bespoke model portfolios based on the fund lists and risk targets set by the clients themselves.

Using the same investment philosophy, process and a proprietary optimisation system that has been endorsed by London University’s Cass Business School and with asset allocation insights from AKG, a leading actuary firm, our portfolios are optimised to maximise risk-diversification benefits that will lead to more stable asset weightings and lower turnover in the long run.

l FE governance The intensive scrutiny and investigation of funds, using more than 90 key quantitative measures, based on a fund’s behaviour, performance, risk and structure.

Contact us in Asia: Hong Kong Office: 18/F, 1 Duddell Street, Central, Hong KongT: (+852) 3905 1088 E: [email protected] W: www.feadvisory.com.hk


METHODOLOGYThe FSA Fund Management Awards reward excellence in fund man-

agement, recognising the funds and managers that our independent judging panel feels are most likely to give strong risk-adjusted returns

to their clients in the future. We asked the judges to take a forward-looking view of the performance of the funds that made the shortlist provided by FSA in partnership with FE Advisory Asia.

This shortlist was put together from a universe of SFC-authorised funds that are registered for sale to retail investors, separated into 14 categories – nine equity, four fixed income and one multi-asset. FE then

applied its Crown Rating methodology using the funds’ alpha, volatility and a measure of the consistency of their performance to allow us to provide the judges with a shortlist of funds for their final nominations.

The fund selector judges were guided by one question: which fund among the shortlist products do you expect to outperform in the next 12 months? The end result is a list of Platinum and Gold winners that best represent the funds that our readers recommend or invest in on behalf of their clients.

For a more detailed methodology, please email Luke Ng, vice-president of research FE Advisory: [email protected]

UNIVERSE

FUND CATEGORISATION

FUND SELECTION

SHORT-LISTEDFUNDS

AWARD WINNERS

Equity Fixed income

Alpha test

Volatility test

Equity Fixed income

Mixed asset

Consistency test

Mixed asset

An independent panel of fund selector judges vote for the Platinum and Gold winners in each category

on a forward-looking investment basis.

Authorised funds in HKRegistered for retail sale

by 3-year track record

SHORTLISTED FUNDSAsia Pacific Equity• Barings Asia Growth• Fidelity Asia Pacific Opportunities• Fidelity Asian Special Situations• First State Asia Pacific Select• First State Asian Equity Plus• Janus Henderson Horizon Asian Growth• JPMorgan Asia Growth• JPMorgan Pacific Securities• Schroder ISF Asian Opportunities• Schroder ISF Asian Total Return

Emerging Market Bond• Aberdeen Global Emerging Markets Corporate Bond• BNY Mellon Emerging Markets Corporate Debt• Fidelity Emerging Market Debt• Investec Emerging Markets Hard Currency Debt• JPM Emerging Markets Debt• NB Emerging Market Debt Hard Currency• T. Rowe Price Emerging Markets Bond

European Equity• AB Eurozone Equity Portfolio• Allianz Euroland Equity Growth• Barings Europe Select Trust• Fidelity European Dynamic Growth• Fidelity European Smaller Companies• HSBC GIF Euroland Equity Smaller Companies• JGF-Jupiter European Growth• MFS Meridian European Core Equity• MFS Meridian European Value• Standard Life Investments European Smaller Companies

Global Bond• AXA USD Hedged Global Bond• BlackRock GF Global Inflation Linked Bond• Capital Group Global High Income Opportunities (LUX)• JPM Income• Legg Mason Western Asset Short Duration High Income Bond• New Capital Wealthy Nations Bond• Pimco GIS Global Bond• Pimco GIS Global Investment Grade Credit• Standard Life Investments Global Inflation Linked Bond

Global Emerging Market Equity• FF Emerging Markets Focus• HSBC GIF Emerging Wealth• JPM Emerging Markets Equity• MFS Meridian Emerging Markets Equity• Mirae Asset GEM Sector Leader Equity• Schroder ISF Global Emerging Market Opportunities• T. Rowe Price Emerging Markets Equity

Global Equity• Allianz Global Equity Unconstrained• Fidelity Global Demographics• Investec Global Franchise• JGF-Jupiter Global Value• Morg Stnly Global Brands• Morg Stnly Global Opportunity• Stewart Investors Worldwide Equity• Stewart Investors Worldwide Leaders• T. Rowe Price Global Focused Growth Equity• Threadneedle (Lux) Global Focus

Greater China/China equity• First State China Growth• First State Greater China Growth• HS China Equity• Invesco China Focus Equity• Invesco Greater China Equity• Investec All China Equity• Matthews Asia China Dividend• Matthews Asia China Small Companies• UBS (Lux) Equity - China Opportunity (USD)• UBS (Lux) Equity - Greater China (USD)

High Yield• Barings Global Senior Secured Bond• BOCHK All Weather China High Yield Bond• Fidelity Asian High Yield• Income Partners Managed Volatility High Yield Bond• Pimco GIS US High Yield Bond• Robeco European High Yield Bonds• Value Partners Greater China High Yield Income



Japanese Equity• Fidelity Japan Advantage• Fidelity Japan Aggressive• Invesco Japanese Equity Advantage• Invesco Japanese Value Equity• JGF-Jupiter Japan Select• JPMorgan Japan (Yen)• Schroder ISF Japanese Opportunities

Mixed Asset• Allianz Asian Multi Income Plus• Allianz Income and Growth• BEA Union Investment Asia Pacific Multi Income• Capital Group Global Allocation (LUX)• First State Asian Bridge• HSBC GIF Managed Solutions Asia Focused Conservative• HSBC GIF Managed Solutions Asia Focused Income• Janus Henderson Balanced• Schroder Asian Asset Income• UBS (Lux) Key Selection SICAV - China Allocation Opportunity

(USD)

Regional Bond• Principal GIF Preferred Securities• AB Mortgage Income Portfolio• Allianz HKD Income• BEA Union Investment Asian Bond and Currency• BEA Union Investment RMB Core Bond• BOCHK HK Dollar Income• CUAM Hong Kong Dollar Bond• HFT (HK) China RMB Fixed Income• HS Hong Kong Bond• HS RMB Bond• Pimco GIS Income

Regional/Single Country EM Equity • Amundi Vietnam Opportunities• First State Indian Subcontinent• JPMorgan Thailand• JPMorgan Vietnam Opportunities• Manulife Taiwan Equity• PineBridge India Equity• PineBridge Latin America Small and Mid Cap Equity• Schroder ISF Emerging Europe• Templeton Thailand• Value Partners Taiwan

Sector Equity• AB International Health Care Portfolio• BlackRock GF New Energy• BlackRock GF World Technology• Fidelity Asia Pacific Property• First State Global Listed Infrastructure• Invesco Global Leisure• Janus Henderson Global Technology• Janus Henderson Horizon Pan European Property Equities• JGF-Jupiter Global Financials• Pictet Clean Energy

US Equity• AB American Growth Portfolio• BlackRock GF US Growth• JPM US Growth• Legg Mason ClearBridge US Large Cap Growth• Morg Stnly US Advantage• Morg Stnly US Growth• T. Rowe Price US Blue Chip Equity• T. Rowe Price US Large Cap Growth Equity• Wells Fargo Worldwide US All Cap Growth• Wells Fargo Worldwide US Large Cap Growth


SHORTLISTED FUNDS



JUDGES

Heads of fund selection and their analyst teams from the following companies participated in the judging process by voting for the Gold and Platinum Winners from the shortlists based on a simple forward-looking question: Which fund do you believe will outperform the category in 2019?

AMG

Axa Insurance Singapore

Bank of China

Bank of Singapore

CA Indosuez

Caidao Capital

CBH Asia

China Merchants Bank

Citi Private Bank Hong Kong

Credit Suisse

DBS

Deutsche Bank Wealth

EFG

FE Advisory

Finexis Asset Management

Hang Seng Bank

Hong Kong Housing Society

HSBC

ICBC

Indosuez Wealth Management

J. Safra Sarasin

Julius Baer

Lombard Odier Singapore

London & Capital Asia

Navigator Investment Services

Noah Holdings

OCBC Wealth Management

Oreana Private Wealth

Prudential

Schroder Wealth Management

TriLake Partners

UBS Wealth Management

Union Bancaire Privée

UOB Private Bank

Vontobel Wealth Management

Management

Heads of fund selection and their analyst teams from the following companies participated in the judg-ing process by voting for the Gold and Platinum Winners from the shortlists:


WINNERSPLATINUM AWARDS

Asia Pacific EquitySchroder ISF Asian Opportunities

Emerging Market BondT. Rowe Price Emerging Markets Bond

European EquityMFS Meridian European Value

Global BondPIMCO GIS Global Investment Grade Credit

Global Emerging Market EquityHSBC GIF Emerging Wealth

Global EquityMorgan Stanley Global Opportunity

Greater China/China EquityInvestec All China Equity

High YieldValue Partners Greater China High Yield Income

Japanese EquityFidelity Japan Aggressive

Mixed AssetCapital Group Global Allocation (LUX)

Regional BondBEA Union Investment Asian Bond and Currency

Regional/Single Country Emerging Market EquityJ.P. Morgan Vietnam Opportunities

Sector EquityInvesco Global Consumer Trends Fund

US EquityMorgan Stanley US Advantage

Excellence in serviceJP Morgan Asset Management

Excellence in innovationPictet Asset Management

GOLD AWARDS

Asia Pacific EquityFidelity Asia Pacific Opportunities

Emerging Market BondAberdeen Global Emerging Markets Corporate Bond

European EquityJGF-Jupiter European Growth

Global BondNew Capital Wealthy Nations Bond

Global Emerging Market EquityT. Rowe Price Emerging Markets Equity

Global EquityAllianz Global Equity Unconstrained

Greater China/China EquityFirst State China Growth

High YieldFidelity Asian High Yield

Japanese Equity

J.P. Morgan Japan (Yen)

Mixed AssetSchroder Asian Asset Income

Regional BondPIMCO GIS Income

Regional/Single Country Emerging Market Equity PineBridge India Equity

Sector EquityBlackRock GF World Technology

US EquityLegg Mason ClearBridge US Large Cap Growth

Excellence in serviceM&G Investments

Excellence in innovationRobeco SAM


AWARD WINNERS

ASIA PACIFIC EQUITYPLATINUM WINNER Schroder ISF Asian Opportunities

GOLD WINNER Fidelity Asia Pacific Opportunities

Fidelity Asia Pacific Opportunities 3 yrs %

Schroder ISF Asian Opportunities 3 yrs %

Toby Hudson

Source: FE Analytics


The fund has a bottom-up stock-picking strategy, and manag-er Anthony Srom aims to construct

a portfolio of 25-35 long-term holdings, and not hug the benchmark.

The fund achieved a 45.5% three-year cumulative return to 30 June 2018, three times the sector average of 14.54% and almost double the MSCI AC Asia ex-Ja-pan index.

This year, Srom says he doesn’t see a huge amount of value. “Given earnings revisions are likely to trend down as global economic growth remains mut-ed, the portfolio is conservatively posi-tioned.” LW

Anthony Srom

T he slowdown of the Chinese econ-omy is one of Toby Hudson’s concerns in 2019. “We have to

expect that the growth numbers com-ing out from China for the next one or two quarters are going to remain soft, and that’s a difficult backdrop for earnings,” the fund manager says.

However, Hudson believes 2019 will be as tough as last year. “A lot of the valua-tions in Asia-Pacific have corrected and some of the macro factors [such as low-er oil prices] are a little bit more helpful, so hopefully it is going to be a slightly better year.”

Regardless of any market conditions, Hudson says he will remain consistent in investing in high quality companies that can compound their earnings over the long-term.

“We focus on companies that grow even in a more difficult macro backdrop and focus on secular growth themes rather than try to play on some of the cyclical factors.” LW

Asia Pacific ex Japan (sector average)Fidelity Asia Pacific Opportunities

Jun ’15 Dec Jun ’16 Dec Jun ’17 Jun ’18Dec

Asia Pacific equity: Fidelity

-20-10

0

10

20

30

40

50

DecSepJun Mar ’16 SepJun Dec Mar ’17 Jun Sep Mar ‘18 JunDec

Asia Pacific ex Japan (sector average)Schroder ISF Asian Opportunities

Asia Pacific equity: Schroder

-20-10

0

10

20

30

40

50


EMERGING MARKET BONDPLATINUM WINNER T. Rowe Price Emerging Markets Bond

GOLD WINNER Aberdeen Global Emerging Markets Corporate Bond

Aberdeen Global Emerging Markets Corporate Bond 3 yrs %

T. Rowe Price Emerging Markets Bond 3 yrs %

Mike Conelius



Stringent risk control to cope with volatile markets and bottom-up credit analysis to earn alpha were

behind the fund’s 12.67% three-year cumulative return to 30 June 2018, compared with a 6.13% sector average. The fund comprises an even balance of investment grade and high yield bonds, but the manager isn’t restricted by tight limits on sector or credit rating.

The portfolio is managed by Siddharth Dahiya with sup-port from a 15-person team. “Credit metrics are in good shape, but geo-political risks will continue this year,” says Dahiya. LW Siddharth Dahiya

The fund has kept its positions de-spite strong market volatility last year, according to portfolio man-

ager Michael Conelius. “These posi-tions have done well for us, such as Tur-key, where we aggressively added into a sharp dislocation in August,” he says. Turkey accounts for at least 9% of the

fund’s portfolio, which is larger than its benchmark’s 5.5% allocation.

On the flipside, Conelius is avoiding some of the largest and most defensive areas of the index, most notably China, which he believes provide limited credit differentiation. His approach is to take measured risks in markets where he sees positive catalysts.

“These include the upcoming elec-tion in South Africa and the election of a more market-friendly new government in Brazil.” Two judges have praised the

fund for the highest return and alpha in the category, with one judge noting strong risk-adjusted returns. LW

Emerging markets (sector average)Aberdeen Global Emerging Markets Corporate Bond

Emerging market bond: Aberdeen Global

-10-5

0

5

10

15

20


Emerging Markets (sector average)T. Rowe Price Emerging Markets Bond


Emerging market bond: T. Rowe

-10-5

0

5

10

15

20

25


AWARD WINNERS

EUROPEAN EQUITYPLATINUM WINNER MFS Meridian European Value

GOLD WINNER JGF-Jupiter European Growth

JGF-Jupiter European Growth 3 yrs %

MFS Meridian European Value 3 yrs %

Florence Taj



A lexander Darwall, head of strate-gy for European growth, is con-cerned about the US-China trade

war. “That could mean slower economic growth globally, and companies reliant on high debt levels to generate growth are also at risk from the prospect of higher interest rates.” Because of that risk, Darwall avoids companies that have a lot of fixed assets and high levels of debt. He prefers companies that can sustain profit growth and margins over a long period of time, and he rarely find companies in the utility, commodities, retail and financial sectors that meet that criteria. LW Alexander Darwall

The fund focuses on companies that offer compelling valuations and sustainable or improving business-

es, regardless of any particular macro-economic or political developments, ac-cording to portfolio manager Florence Taj.

“In terms of outlook, we avoid spec-ulating on near-term information and

short-term news flow. Invest rather speculate, analyse rather than forecast and focus on downside risk,” Taj says, noting that over the last five years, the portfolio has had a low turnover rate of 11%. Taj focuses on high-quality com-panies with sustainable above-average returns and aims to identify companies whose quality and intrinsic value are not yet fully reflected in their valuation. Several FSA Awards judges have com-mended the fund. “One of the highest conviction European equity fund with

consistent alpha,” one remarked. Anoth-er judge highlighted the product’s high downside protection. Two more judges were positive over the fund amid expec-tations that value stocks will outperform their growth peers this year. LW

Europe small/mid cap (sector average)JGF-Jupiter European Growth

European equity: JGF

-15-10

-5

0

5

10

15

20

25

30


Europe inc UK (sector average)MFS Meridian European Value


European equity: MFS

-15-10

-5

0

5

10

15

20

25

30


GLOBALBONDPLATINUM WINNER PIMCO GIS Global Investment Grade Credit

GOLD WINNER New Capital Wealthy Nations Bond

New Capital Wealthy Nations Bond 3 yrs %

Pimco GIS Global Investment Grade Credit 3 yrs %

Mark Kiesel



The pause in US interest rate hikes this year should make the US dol-lar weaker, which is positive for

emerging markets, according to Michael Leithead, London-based senior portfo-lio manager. “Emerging markets can continue to do well even if they had a very strong January. Valuations are still fairly attractive versus US credit, and as such, we favour emerging markets over developed markets,” he says. He is also seeing opportunities in the Middle East, where balance sheets remain robust and debt-to-GDP is low. LW

Michael Leithead

The fund is highly rated, with FE Advisory giving it five crowns and Morningstar giving it five stars

and a Silver (forward-looking) Analyst Rating. The fund has been managed by Mark Kiesel for 15 years, according to a Morningstar report. Kiesel is sup-ported by Jelle Brons and Mohit Mittal,

who became co-managers of the fund in 2016. They are supported by a sizable team of 50 credit analysts and 20 corpo-rate portfolio managers.

Although the fund is focused on in-vestment-grade corporate bonds, it may invest in other bond instruments. As of the end of December, 64% of its portfo-lio was in investment grade, followed by 24% in government-related entities, ac-cording to the fund factsheet. The fund has a 15% weighting in emerging mar-kets, which was a detractor to the fund’s

performance in 2018, according to the Morningstar report. However, the ex-posure has helped the product in prior years and this year expectations are for a rebound in emerging markets. LW

US Dollar (sector average)Pimco GIS Global Investment Grade Credit


Global bond: PIMCO

-30

3

6

9

12

15

Global (sector average)New Capital Wealthy Nations Bond

Global bond: New Capital

-30

3

6

9

12

15



AWARD WINNERS

GLOBALEM EQUITYPLATINUM WINNER HSBC GIF Emerging Wealth

GOLD WINNER T Rowe Price Emerging Markets Equity

T Rowe Price Emerging Markets Equity 3 yrs %

HSBC GIF Emerging Wealth 3 yrs %

Angus Parker



Portfolio manager Gonzalo Pánga-ro believes that investors over-re-acted to potential risks to emerg-

ing markets last year. “Strong relative economic growth, earnings growth and more attractive valuations should help support emerging markets this year,” he believes. Pángaro focuses on high-qual-ity growth companies and tires to find unnoticed investment opportunities, such as First Abu Dhabi Bank. “We also use uncertainty and volatility within the markets to our advantage and buy names we like at very attractive valua-tions, such as some names in Brazil.” LW Gonzalo Pángaro

The fund invests in equities the manager believes will benefit from rising consumer wealth in emerg-

ing markets. This broad objective means that manager Angus Parker can look be-yond domestic companies in the grow-ing economies of Asia, EMEA and Latin America, and also invest in companies

based in OECD countries whose reve-nues and profits are being boosted by that increasing consumption.

As a result, holdings ranged from well-established US names such as Johnson & Johnson to more recent heavyweights such as China Mobile. In general, the fund tended to favour investments in large cap stocks, pre-dominantly in the US and Europe. HSBC believes that following the sell-off late last year, emerging mar-ket stocks offer attractive valuations.

A senior fund selector awards judge de-scribed it as a “top alpha-generating emerging market fund with the lowest volatility and downside risk”, and an-other concurred, commending it for its “strongest risk-adjusted return”.

The fund earned a 26.1% three-year cumulative return to 30 June 2018, com-pared with a 28.72% return for the MSCI AC World index and a sector average of 12.25%. LW

Emerging markets (sector average)T. Rowe Price Emerging Markets Equity

Global emerging market equity: T.Rowe

-15-10-505

1015

2025303540


Emerging markets (sector average)HSBC GIF Emerging Wealth


Global emerging market equity: HSBC

-15

-10

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0

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15

20

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30


GLOBAL EQUITYPLATINUM WINNER Morgan Stanley Global Opportunity

GOLD WINNER Allianz Global Equity Unconstrained

Allianz Global Equity Unconstrained 3 yrs %

Morgan Stanley Global Opportunity 3 yrs %

Kristian Heugh



The fund’s co-managers, Tobias Kohls and Christian Schneider, ex-pect a return to more normalised

levels of volatility after last year’s wild gyrations, as well as increasing differ-entiation between companies and sec-tors. Despite continued worries about slower economic growth and tightening liquidity, they reckon that the “quality growth companies of the type we invest in should still find long-term valuation support”.

The fund, unconstrained by bench-mark, made 37.9% a three-year cumula-tive return to 30 June 2018, outperform-ing the MSCI AC World index (28.72%) and sector average (18.55%). LW

Christian Schneider

Portfolio manager Kristian Heu-gh invests in what he determines are high quality companies resil-

ient to macro-economic risk. He prefers companies with sustainable competitive advantages, such as a patent portfolio, brand name recognition, the ability to redeploy capital at high rates of return,

strong free cash flows and significantly lower leverage relative to the MSCI All Country World Index.

He also likes companies with diverse business drivers that are not tied to any particular market environment. “Given the resilient nature of companies that the team invests in, macroeconomic and individual country risk are not con-cerns to the fund,” he says.

Heugh and his team assess company prospects over a three- to five-year time horizon and only hold 30-45 names,

with the top 10 of the fund’s holdings ac-counting for 50% of its assets. One FSA Awards judge commented that the fund is the “top alpha-generating global eq-uity fund with the largest three-year re-turns”. LW

International (sector average)Allianz Global Equity Unconstrained

Global equity: Allianz

-505

1015

2025303540


International (sector average)Morgan Stanley Global Opportunity


Global equity: Morgan Stanley

-100

10

20

30

40

50

60

70

80


AWARD WINNERS

GREATER CHINA/CHINA EQUITYPLATINUM WINNER Investec All China Equity Fund

GOLD WINNER First State China Growth

First State China Growth 3 yrs %

Investec All China Equity Fund 3 yrs %

Greg Kuhnert



Co-manager Martin Lau eschews the short-term gyrations and noise that often characterises the China

equities markets. He says he focuses on bottom-up stock picking, valuations and company visits.

His China Growth Fund achieved a 36.1% three-year cumulative re-turn to 30 June 2018, outperform-ing the sector average of 15.6%. “A rigorous investment process in essential, especially as Chi-na’s economy slows,” Lau says. “The recent rally in China shares despite downward revisions to growth is posi-tive for the market,” he says. “A lot of bad news is priced in.” LW

Martin Lau

Manager Greg Kuhnert insists that a disciplined conviction strategy is essential to nav-

igate the noise and inefficiencies of the Chinese equities markets in or-der to find “good quality companies with improving operating momen-tum that are ignored by the market”.

The fund had a 39.26% three-year cu-mulative return to 30 June 2018, in-stark contrast to the -15% return for its benchmark, the MSCI All China In-dex, and the sector average of -4%. He admits that the markets face several short- to medium-term risks, “most sig-nificantly policy execution and growing trade tensions between China and its trade partners,” but adds that “the long-term investment case for China remains clear and opportunities are emerging in

this environment”.At least two Hong Kong-based fund

selector judges share Kuhnert’s confi-dence in a China “all share” approach, with one noting that a “diversified ap-proach to investing in China (on- and off-shore equities) could outperform” and another stating a belief that “an all shares portfolio will be best positioned to manoeuvre in 2019”. LW

China (sector average)First State China Growth

Greater China/China equity: First State

-25-20-15-10-505

1015

2025303540


China (sector average)Investec All China Equity


Greater China/China equity: Investec

-30-20

-10

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10

20

30

40

50


HIGH YIELDPLATINUM WINNER Value Partners Greater China High Yield Income

GOLD WINNER Fidelity Asian High Yield

Fidelity Asian High Yield 3 yrs %

Value Partners Greater China High Yield Income 3 yrs %

Gordon Ip



Manager Bryan Collins believes individual credit selection within a well-diversified port-

folio is key to performance. His fund achieved a 13.59% three-year cumu-lative return to 30 June 2018, com-pared with a peer average of 4.9%. “The widening of spreads in the final quarter of 2018 provides plenty of op-portunity to lock in 6% - 7% income yields this year, as well as enjoy capital price gains with short-dated bonds as they near maturity,” Collins says.

He argues that new issuance indiges-tion shouldn’t be a problem in 2019 and identifies undervalued perpetual bonds for duration exposure. LW

Bryan Collins

In contrast to long-only high yield bond products, the fund is flexible and can employ various sub-strate-

gies to capture opportunities in differ-ent market conditions, says Gordon Ip, the product’s lead manager and chief in-vestment officer for fixed income.

For example, the fund invests in what Ip calls distressed situations in which it will acquire a lot of bonds of a distressed company at a low price.

“We spend the next two years to work out a restructuring exercise with the company, and from start to finish, we [could make] 200% from one single name,” he says.

The fund also invests in senior and mezzanine loans, which Ip believes provide stable income. As of end-De-cember, real estate high yield accounts

for the highest weighting of the portfo-lio (43%). “We believe property is one area that will likely have less impact from the trade war between US and China.” LW

Asia Pacific (sector average)Fidelity Asian High Yield

High yield: Fidelity

-5

0

5

10

15

20


Global high yield (sector average)Value Partners Greater China High Yield Income


High yield: Value Partners Greater

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0

5

10

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25

30


JAPANESE EQUITY

AWARD WINNERS

PLATINUM WINNER Fidelity Japan Aggressive

GOLD WINNER JP Morgan Japan (Yen)

JP Morgan Japan (Yen) 3 yrs %

Fidelity Japan Aggressive 3 yrs %

Nicholas Price



The three co-managers -- Nich-olas Weindling, Miyako Urabe and Shoichi Mizusawa -- adopt

a growth at a reasonable price (Garp) strategy, conducting bottom-up re-search to identify undervalued earnings growth among around 400 stocks listed on the Tokyo stock exchange.

The fund produced a 47.81% three-year cumulative return to 30 June 2018, trumping its TSE Topix benchmark (25%) and its sector average (20.87%). Deflation risks are a constant in Ja-pan, but in 2019 external headwinds are more likely to hurt sentiment. Nonethe-less, the managers are encouraged by historically low stock valuations. LW

Shoichi Mizusawa

Portfolio manager Nicholas Price partly credits his long residency in Japan and fluency in the language

for his ability to uncover gems among small- and mid-cap stocks that are missed or ignored by other investors. He and his team of nine portfolio managers and local analysts make frequent visits

to companies during the year in order to assess potential and existing invest-ments.

The fund earned a 51.58% three-year cumulative return to 30 June 2018, twice the return on the TSE Topix benchmark and well above its 20.87% sector average.

A senior Hong Kong fund selector commended the fund for its “strong al-pha and risk-adjusted returns”, and an-other described it similarly as “aggres-sive with controlled volatility”.

When evaluating a company, Price looks for a strong three-to-five year re-cord of growth, a clearly-defined busi-ness model and a shareholder-friendly management style.

Although worries over slowing eco-nomic growth in China, trade disputes and US interest rate increases are likely to persist this year, “low valuations - with half of Japanese stocks trading below book price - suggests much of the risk is already discounted,” Price says. LW

Japan (sector average)J.P. Morgan Japan (Yen)

Japanese equity: JP Morgan

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Japan (sector average)Fidelity Japan Aggressive


Japanese equity: Fidelity

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MIXED ASSETPLATINUM WINNER Capital Group Global Allocation (LUX)

GOLD WINNER Schroder Asian Asset Income

Schroder Asian Asset Income 3 yrs %

Capital Group Global Allocation 3 yrs %

Paul Flynn



Key to different market environ-ments is investment flexibility, according to Ricky Tang, deputy

head of multi-asset for North Asia. Sub-sequently, the fund had 60% of its assets in equities at the start of 2018. “But with volatility going higher amid the Trump trade war and other risks, we actually have been quite active in reducing our equities allocation down to 50%.” Tang expects volatility to continue this year. “We have to bit a bit more tactical, with a bias towards de-risking.”

Managed by Patrick Brenner, the fund gets the highest ratings from both FE (5 crowns) and Morningstar (5 stars) .LW Patrick Brenner

An FSA Awards judge was im-pressed by the fund’s “strong al-pha and risk-adjusted return”, and

another praised the fund’s “investment process and philosophy”.

The fund earned a 22.89% three-year cumulative return to 30 June 2018, surpassing its sector (7.94%), and the

Bloomberg Barclays Global Aggregate index (7.95%), but less than the MSCI ACWI (29.26%).

Several managers run a portfolio that maintains a 60:40 allocation to equities and bonds, respectively. The largest position is n US government bonds (11.7%). It only invests in individ-ual securities, not other funds, and ul-timate accountability – although he is not the lead manager – falls on princi-pal investment officer Paul Flynn.

The aim is to preserve capital but in-

crease it in the long term, while earning a high level of income. The fund faces similar challenges to ones it navigated late last year, such as trade tensions, de-teriorating China growth and slower growth in the US too as it enters the fi-nal stage of its economic cycle.

The fund, which gets a five crown rat-ing from FE, will focus on companies that show real profits and strong cash flows, and in sectors such as healthcare, which is expected to enjoy secular ex-pansion.

Asia Pacific (sector average)Schroder Asian Asset Income

Mixed asset: Schroders

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Balanced (sector average)Capital Group Global Allocation (LUX)


Mixed asset: Capital Group Global

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25


REGIONAL BONDPLATINUM WINNER BEA Union Investment Asian Bond and Currency

GOLD WINNER PIMCO GIS Income

PIMCO GIS Income 3 yrs %

BEA Union Investment Asian Bond and Currency 3 yrs %

Pheona Tsang



The fund is highly rated, receiving five crowns from FE Advisory and five stars and an analyst rating of

Silver from Morningstar. It also won the Platinum Award in last year’s FSA Awards. Co-managed by Alfred Murata and Daniel Ivascyn since 2012, the fund last year added a third manager, Joshua Anderson. Asset/mortgage-backed se-curities make up 58% of the portfolio. One judge believes that the product is a “core fixed income solution designed to fulfil the common objectives of global investors to generate consistent returns and income stream”. LW

Alfred Murata

A Hong Kong fund selector reck-ons that “Asian bond fundamen-tals and valuations are attractive

and can outperform other parts of the world,” while another was impressed by Pheona Tsang for managing a “top per-forming regional bond fund excelling on multiple fronts”.

It earned a 20.46% three-year cumu-lative return to 30 June 2018, nearly five times the sector average of 4.32%, ac-cording to FE Analytics, which awarded the fund a five-crown rating.

Tsang agrees that valuations are ap-pealing, with yields on Asian bonds still at high levels despite the rally since the start of the year. Yet, she is circumspect about the outlook:

“I’m encouraged that a restrained Federal Reserve will support bond pric-

es, but wary of volatility as the US econo-my enters the final stage of its cycle,” says Tsang.

She is underweight non-property China bonds because of default fears, but likes the Chinese property sector – which dominates the Asia dollar bond market – and will make local currency allocations to Indonesia and China. LW

AWARD WINNERS

Asia Pacific (sector average)BEA Union Investment Asian Bond and Currency


Regional bond: BEA

-5

0

5

10

15

20

25

US Dollar (sector average)PIMCO GIS Income

Regional bond: PIMCO

-50

5

10

15

20

25



REGIONAL/SINGLECOUNTRY EM EQUITYPLATINUM WINNER JP Morgan Vietnam Opportunities

GOLD WINNER PineBridge India Equity

PineBridge India Equity 3 yrs %

JP Morgan Vietnam Opportunities 3 yrs %

Isaac Thong



With India importing most of its crude needs, high oil prices im-pact the country’s fiscal and

current account deficits, which in turn affect the currency, according to Huzai-fa Husain, head of India equities. “The fund has almost no control over the cur-rency movement, although we try to minimise currency risk by taking steps such as investing in top quality export-ers and in companies that do not have debt on their balance sheets.” That said, Husain’s outlook for 2019 is positive. “We expect the stress on the currency and interest rates to abate as crude oil prices decline.” LW Huzaifa Husain

The fund invests in quality names with strong governance and/or companies positioned in in-

dustries with structural growth, says Isaac Thong, one of three co-managers. “Among state-owned enterprises, we like investing in companies in oligopo-listic sectors such as alcoholic beverag-

es, airports, and banks.”The fund achieved a 58.6% three-

year cumulative return to 30 June 2018, well above the 8.75% average performance of other Asia-Pacific sin-gle country funds. It also exceeded the return on the MSCI Vietnam index (34.47%), although it is not the fund’s official benchmark.

Thong and his team believe that the Vietnam growth outlook continues to be positive and among the most sus-tainable in Asia, led by structural for-

eign investment inflow, which pow-ers manufacturing, wage growth and consumption. A senior Hong Kong fund selector concurs, also noting that “Vietnam will be one of the major bene-ficiaries if the trade tariffs against Chi-nese goods continues.”

Nevertheless, the mangers are aware that the trade dispute and any resur-gence of US dollar strength might lead to risk aversion among international investors that could be detrimental to Vietnam’s stock market performance. LW

India (sector average)PineBridge India Equity

Regional/single country EM equity: PineBridge

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50

60


Other Asia Pacific Single CountryJ.P. Morgan Vietnam Opportunities


Regional/single country EM equity: JP Morgan

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20

40

60

80

100


SECTOREQUITY

Teera Chanpongsang

AWARD WINNERS

PLATINUM WINNER Invesco Global Consumer Trends Fund

GOLD WINNER BlackRock GF World Technology

BlackRock GF World Technology 3 yrs %

Invesco Global Consumer Trends Fund 3 yrs %

Ido Cohen



A 20-year veteran of the technology sector, manager Tony Kim aims to generate alpha through a combi-

nation of stable core holdings and high-er growth stocks. Diversification is key to his team’s approach, spreading bets across industries, geographies, mar-ket-caps and investment styles.

The fund earned an 84.7% three-year cumulative return to 30 June 2018, ex-ceeding the MSCI ACWI Information Technology index (74.85%) and the sector average (48.84%).

Sino-US trade tensions have depressed cyclical tech stocks, but Kim is enthusiastic about low valuation entry points for semi-conductor and Chinese internet stocks. LW

Tony Kim

Co-manager Ido Cohen looks for companies that are “profiting from a transformation in consum-

er behaviour due to mobile connectivity and the technology-enabled breakdown of geographic barriers”. His focus in-cludes e-commerce, the shift to online advertising and the emergence of video

games as a mainstream media. A senior fund selector judge described Cohen’s approach as a “unique thematic play”.

The fund achieved a 60.25% three-year cumulative return to 30 June 2018, outperforming its benchmark MSCI World Consumer Discretionary Index (35%) and its sector average by a substantial margin.

Cohen expects a low economic growth environment in 2019, as the benefits of US tax stimulus and dereg-ulation are being offset by higher inter-

est rates, rising labour costs and trade disputes .

Consequently, he favours “secular growth companies and disruptive mar-ket share takers”. He believes the con-sumer sector should continue to provide attractive opportunities that meet this criteria.

“Technology is changing where we shop, how we shop, how we consume media, how we travel, and as a result, how we spend our discretionary in-come,” he says. LW

TMT (sector average)BlackRock GF World Technology

Sector equity: BlackRock

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Consumer Goods & Services (sector average)Invesco Global Consumer Trends Fund


Sector equity: SICAV - Invesco

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USEQUITYPLATINUM WINNER Morgan Stanley US Advantage

GOLD WINNER Legg Mason ClearBridge US Large Cap Growth

Legg Mason ClearBridge US Large Cap Growth 3 yrs %

Morgan Stanley US Advantage 3 yrs %

Dennis Lynch



Co-managers of the fund, Peter Bourbeau and Margaret Vitra-no, expect a positive GDP growth

in the US but at a slower pace than the 3.4% in Q3 last year. Capex is also ex-pected to slow as the tax benefits are slowly fading and uncertainty over tar-iff impacts may cause companies to de-lay some projects. “Owning companies with defensible businesses will become more important as growth slows down and liquidity shrinks,” Bourbeau says. These types of companies are insulat-ed from macro risks, they believe, and include biotechnology, enterprise soft-ware, e-commerce and select media names. LW

Margaret Vitrano

The highly-concentrated fund of 35 positions primarily invests in es-tablished large-cap high quality

companies, according to lead manager Dennis Lynch, who is also the head of the New York-based growth team.

“Positions are sized based on the uniqueness of the company as deter-

mined by the strength and sustainabil-ity of its competitive advantages, as well as the size of the company’s over-all market opportunity,” he says.

Besides fundamental analysis, stock selection is influenced by the firm’s “disruptive change research”, which measures how a company can chal-lenge the status quo of the industry. Lynch also highlighted that impor-tance of being aligned with the fund’s shareholders, noting that that the team is required to allocate a portion of their

own compensation into the funds they manage. One FSA Awards judge praised the fund’s “consistent outperformance”, with another saying that it has the low-est volatility within the US equity space. LW

North America (sector average)Legg Mason ClearBridge US Large Cap Growth

US equity: Legg Mason

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North America (sector average)Morgan Stanley US Advantage


US equity: Morgan Stanley

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The FSA Fund Management Awards include an additional category that recognises fund groups. The editorial team did not choose the winners. We asked our fund selector judges to single out firms that had been a standout in 2019 by virtue of two distinguishing factors in asset management -- ser-vice and innovation. We provided a free-form question asking for the

name of a firm in each category. We also asked to give examples to justify their choice. FSA totalled up their selections, resulting in a Platinum and Gold winner in each of the two categories – going the extra mile for service and product innovation. The firm awards, chosen by the fund selec-tors through a qualitative filter, are therefore a well-deserved vote of confidence.

FIRM AWARDS


EXCELLENCE IN SERVICE

FIRM AWARD WINNERS

PLATINUM WINNER JP Morgan Asset Management

W ild market swings character-ised 2018 and investors needed to understand the situation and

be reassured about their portfolio posi-tions. That is likely one reason why sev-eral awards judges highlighted JP Mor-gan Asset Management’s client visits, education and training.

One judge commented on the firm’s “series of activity in 2018, from invest-ment conference and events to in-house morning meetings and luncheon train-ings”. Another judge wrote: “They keep doing numerous client education events including in China in volatile market en-vironments.”

Steven Billiet, CEO of JP Morgan As-set Management in Singapore, says an element of service especially valued in Asia is the firm’s Market Insights pro-gram. The program is run globally but

there is a special version tailored to Asia in local language with local resourcing.

“These are very powerful tools [dis-tribution] clients can rely on to improve their conversations with their own cli-ents.

“The Market Insights program is the cornerstone of what we do to provide clients with insights. It’s a key differen-tiating factor.”

Of course, there are a variety of ele-ments involved in client service – edu-cation, training, manager visits, sales team contact, etc. Another differentia-tor, according to Billiet, is that JP Mor-gan splits its service teams, each target-ing a specific element of service.

“We don’t have one person having to do five different things and therefore unfocused.”

Additionally, the firm’s regional ser-vice groups are integrated with global

GOLD WINNER M&G Investments

One awards judge wrote: “Client driv-en and long-term focused. Con-stantly seeking feedback to incor-

porate in their content.”Another judge commented: “Strong

support and knowledgeable and on top of things. Prompt updates after major mar-ket events in a responsive and accurate manner.”`

William Tan, M&G’s head of interme-diary channels for APAC, says that during market volatility in 2018, especially in the last quarter, his firm moved quickly to contact distributor clients.

“We don’t wait for the client to ask us. We try to give information as relevant as

The firm also taps global resources at its London headquarters, Tan says. M&G runs the Bond Vigilantes website and an equity forum with timely market views that get market information to clients.

One element of service particular-ly valued in Asia is being proactive, Tan says.

“It’s the key. In good times everyone will be there with information. When the market is challenging, like in Q4, it is about being out there to reassure our client distributors proactively instead of waiting for questions.” LW

Stephen Billiet

possible, whether it is face-to-face meet-ings or email.”

The focus is on timely sharing of infor-mation, he says. The firm uses the acro-nym RED – reassure, educate and deepen the relationship with client distributors.

William Tan

service teams. “We are able to leverage global and regional resources for client outreach.” LW


EXCELLENCE IN INNOVATIONPLATINUM WINNER Pictet Asset Management

Awards judges singled out the firm’s Smart City Fund as an example of innovation.

“They have made a great effort to cre-ate [Smart City] and that fund should able to attract those investors who have strong conviction that technol-ogy advancement will play a vital role in future corporate success,” wrote one awards judge.

Lawrence Tse, head of intermediary in Asia, explains that Smart City is not another tech-focused fund, but more di-versified. It covers companies engaged in innovation that addresses urbanisa-tion.

“In the old days, we thought of infra-structure as toll roads. However, at Pic-tet we look at it as the sustainable de-velopment growth of cities. The fund’s portfolio is no longer a tech-driven

thematic fund. It has 20% industrials, some consumer staples and even finan-cials. It is more diversified, fitting into a late economic cycle perspective.”

To keep abreast of investible themes, the firm engages with a third-party think tank, the Copenhagen Institute for Future Studies, and discusses the more profound changes happening. “That guides us to look at trends – de-mographics, sustainability, economic growth, technology. There are [other] themes we like but they are not yet via-ble, so we are not able to launch them.”

Another judge noted that Pictet also has an ESG mandate that applies to all its funds and the firm “always launches theme funds ahead of its peers”.

In Asia, there is no shortage of avail-able thematic funds, Tse added. They vary in terms of investment philosophy

GOLD WINNER Robeco SAM

Themed funds typically start out more broadly and then become more niche focused, says Tom

Keenan, Robeco’s head of wholesale dis-tribution in Asia ex-Japan.

“What we’re noticing is Asian clients seeking more granular exposure to specific trends in the market.”

To that end, the firm in November 2017 launched the Global Fintech Eq-uities Fund, which was split out from the firm’s New World Financials Fund. It has since raised €600m ($684m), he says.

“Many private banks have CIO calls specifically for a fintech allocation and

aged by Robeco SAM, the firm’s sus-tainability unit and Credit Suisse was an anchor client. The fund has since raised €100m, Keenan says.

In 2019, the firm will promote ex-isting themes instead of launching new ones. “A theme is not a trade, it’s a long-term trend. You need substance to back up a marketing idea. We re-search and study themes for a number of years before we launch as a separate theme.”

Keenan added that Robeco’s funds all go through an ESG process, re-gardless of the asset class. LW

Lawrence Tse

there is very broad representation of the fund on the private bank approved product list.”

Last year, the firm also launched a Smart Mobility Fund, investing in the electrification of transport. It is man-

Tom Keenan

and what he calls “purity”: “The [portfo-lio] stocks have to contribute and bene-fit from the theme. That puts us on tight discipline in stock selection.” LW


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EDITOR’S LETTER · recommendation or endorsement. The material contained in this publication is intended for information only and does not constitute the provision of advice. Neither