These awards are for institutional, rather than retail, fund management excellence in the Asia-Pacific. Winners will be honoured at a black-tie event at the Conrad on May 9; for details, contact Foster Wright at [email protected] or call (852) 2122 5282.
Global fixed-income, one-year performance
OUB Asset Management
OUB jostled aside competitors including two of BritainÆs biggest houses, Barings and M&G (part of Prudential Plc) for this award. OUB has a history of managing institutional funds dating back to 1977. It is natural to expect one of SingaporeÆs leading financial institutions to have a strong list of local clients, which OUB has, but 56% of its business comes from overseas, highlighting its strong international capabilities. Over the past decade, its assets under management have ballooned from S$426 million to S$5.3 billion, rising nearly 50% from 2000 alone.
Executive directors Goh Mui-hong and John Lim have a combined experience of 33 years in OUBÆs investment operations, while CIO Jason See and head of fixed income Chong Jiun-yeh have averaged 11 years at the firm. This is a stable team, despite its being incorporated into UOB Group in January.
Performance was added by being overweight dollars and underweight yen, and using a currency overlay to further reduce yen exposure. Toward the end of 2001 when OUB sensed the bottom of the interest rate cycle, it began to divest some bond exposure into money markets and cash. ôOur defensive stance and negative outlook on the long end of the yield curve contributed to the bulk of the outperformance,ö the firm said.
Global fixed-income, five-year risk-adjusted performance
The management styles of Capital and its main competitor for this award, Aberdeen Asset Management, are quite different. This award is not a vindication of one style over another: both have terrific performance track records that maximize returns for the least risk. But we had to recognize a few areas of excellence at Capital that make it the envy of fund managers û of equities or fixed income û everywhere.
For starters, take CapitalÆs commitment to research. This is also an Aberdeen strength, but Capital spent $250 million on research in 2001. The firm has also invested heavily in technology, with a team of seven dedicated fixed-income technologists who supply quantitative, portfolio and scenario analytics to the fixed-income investment team.
Its bond analyst and fund managersÆ average tenure at the firm is 13 years. CapitalÆs portfolio construction system has been in place since 1957, another remarkable sign of long-term commitment. Although best known as an equities house, Capital is fast becoming a bond powerhouse as well, and now manages $50 billion in fixed-income assets.
Asia ex-Japan equities, one-year performance
Invesco makes no bones about being aggressive and smart trading in Asia has allowed the firm to thrive amid the Asian financial crisis, the end of the Nasdaq tech bubble and the impact of 9/11. In the hands of amateurs, such an aggressive approach can be disastrous. But InvescoÆs senior investment professionals have been with the company for an average 10 years, indicating an underlying stability and success.
While some fund housesÆ strength lies in their internal research power, Invesco recognizes that its fund managers are generalists who leverage sell-side analysts to complement the firmÆs own research. ôOur job is to process information and monitor changes in expectation,ö Invesco says, letting the hordes of broker analysts provide ideas that InvescoÆs disciplined investment teams can filter.
Last, Invesco makes a stance that good fund managers will not shadow an index. ôAsian stocks outperformed both the S&P and Nasdaq since March 1998 but the MSCI index massively underperformed,ö Invesco notes. ôFund managers in the region...have become index-followers. We believe it is time to change.ö
Asia ex-Japan equities, five-year risk-adjusted performance
ABN Amro Asset Management
Frank Kusse, CEO Asia Pacific at ABN Amro Asset Management, is a literary sort. ôTS Elliot wrote,ö he told us, ôæWhere is the knowledge which has been lost in information and where is the wisdom which has been lost in knowledge?Æö We agree that this is an important question for fund managers to ask themselves. The industry is driven by fads and luck; fund managers treat CNBC and other sources of noise as if they were the oracle of Delphi. How many of you outperformed in late 1999? And now where are you? Probably not on our nomination list.
But ABN Amro is, and among the strengths of this organization is its handle on risk management combined with a long-term view. ôOur Asia ex-Japan portfolios under the management of the existing team have out-performed the benchmark in six of the past seven years,ö says the firm. ôBut what is more ... we have achieved out-performance in excess of 3% annually with tracking error below 5%.ö
Furthermore, the firm has not lost any clients for seven years and has seen funds in Asia ex-Japan portfolios increase 7% over the course of 2001.
We highly value client testimonials, and one of ABN AmroÆs recommended the firm on several counts. In addition to areas such as risk management and a strong executive team, this client also highlighted ABN AmroÆs assistance in helping it build its own Asia-Pacific in-house capabilities, by training its staff and sharing its market experience.
Tomorrow we will announce the nominees and winners for both Hong Kong and Singapore equities (one-year performance and five-year risk-adjusted performance).
Awards are based on a combination of data supplied by Bank of Bermuda, Eureka Asia Hedge, Watson Wyatt and William M Mercer; by applications from nominees; and by the judgement of PensionsAsiaÆs editorial team. Decisions are solely those of PensionsAsia and are final.