Share Prices & Company Research


02 September 2020

Asia Fund Focus

A focus domestically, as well as within Europe and the US, often takes centre stage within the portfolios of UK investors. Asia however, is perhaps an area that many would be wise to utilise. It is possibly the cultural differences and lack of expertise that creates such a rift, in fact, very few UK investors understand the differences between Asia and the western world, culturally or economically. The fear of the unknown means that many are missing out on investment opportunities that can provide, in many cases, strong performance.
With diversification also key to creating well-rounded, less volatile portfolios, a step into Asia can further provide differentiated opportunities with impressive results. However, the weighting of characteristics used to evaluate an open-ended fund will likely change when investing in an area of which little information and knowledge is available. In this case, trust and conviction in a portfolio manager’s strategy, expertise and investment selection ability become increasingly important.

One such fund that rarely appears on the radar of UK investors, but nonetheless fits this narrative extremely well, is the Comgest Growth Japan Fund. Run by Richard Kaye, a Briton by birth but someone who has lived in Japan for more than 25 years, understands the Japanese culture extremely well. The four-person strong team, three of which are based in Tokyo, focuses on quality growth Japanese companies, many of which also utilise other fast-growing Asian nations, such as China and Vietnam, to generate much of their revenue. With most Japanese-focused funds in the UK structured as investment trusts, the open-ended structure of the Comgest fund also adds to its appeal, increasing the range of entry points into investments in the region and giving investors increased optionality.

Those with a higher risk tolerance, however, may want to consider emerging markets funds that seek to capture the impressive growth of companies in the region. The BNY Mellon Global Emerging Markets Fund has provided investors with strong, consistent performance. The fund’s experienced management team provides investors with exposure to countries such as India, China and South Africa which, whilst increasing in popularity, are still underrepresented amongst most portfolios. Additionally, the fund’s open-ended structure also provides the unique benefit of avoiding a share price premium/discount to the net asset value of the fund. This is particularly beneficial for funds investing in the emerging market regions, where volatility tends to be higher, allowing open-ended funds to reduce share price volatility and paint a clearer picture when it comes to their actual performance. 

Please note that investments and income arising from them can fall as well as rise in value. Please note that this communication is for information only and does not constitute a recommendation to buy or sell the investments of the investments mentioned.
Asia Fund Focus
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