The leading actively-managed funds, explained (part 2)
Every year, AsianInvestor's editorial team conduct an intensive analysis of the region's leading asset management service providers, fund products and asset managers, to ascertain the top organisation of each category over the previous year.
The winners of these categories must combine a mixture of business performance, growth and progress, measured on both quantitative and qualitative criteria.
Below, we detail why we chose the second half of this year's leading institutionally-focused funds by asset class. This year's winners were based upon a combination of quantitative and qualitative metrics, with performance data over one, three and five years kindly supplied by eVestment and Mercer; our thanks for their continued support. The standout funds were assessed on their risk-adjusted returns over these periods, and then viewed for their strategies and focuses.
We will begin to announce our final category of marquee award winners on Wednesday (June 24). In addition, please click here to view the first part of the asset class awards. And you can also click here to view the explanations for the winners of the first half of our local fund manager awards, and click here to view the second part. And to read about the rationales behind this years top Asset Service Providers, please click here.
T. Rowe Price
Global Focused Growth Equity Fund
T. Rowe Price’s global focused growth equity fund stood out from its rivals for its strong investment performance amid a turbulent environment.
According to eVestment, the fund was among the top vehicles that generated attractive risk-adjusted returns with high information ratios over one, three and five years. It significantly outperformed the benchmark MSCI All Country World Index in 2020.
The objective of the fund is to construct a concise, unconstrained global equity portfolio of highest-conviction and most alpha-rich ideas. It looks for companies with stable-to-improving business fundamentals and prospects for accelerating returns on capital over a 12- to 24-month time horizon.
The portfolio’s strong alpha came down to its disciplined framework and ability to take a contrarian stance in the face of a difficult and volatile situation fuelled by the pandemic.
David J. Eiswert and Nabil Hanano have been managing the fund since 2012, alongside with three other dedicated team analysts.
EMERGING MARKET EQUITY
JP Morgan Asset Management
GEM Focused Fund
The GEM focused fund offered by JP Morgan Asset Management netted this year’s award for the emerging market equity category for its superior growth in profits over sustained periods.
It was one of the best-performing strategies to produce outstanding performance, according to eVestment. It delivered information ratios of 3.60, 2.15 and 1.76 over one, three and five years, higher than most its peers in the category.
This strategy has a long-term, high conviction approach with a growth and quality focus, based on in-depth fundamental analysis of the economics, duration and governance of a business. It also combines local knowledge with a global perspective, with research analysts conducting thousands of company visits even amid the pandemic.
The fund seeks to outperform by compounding growth in profits over long periods. It is managed by Leon Eidelman and Austin Forey, who consistently stuck with the fund’s investment discipline in the face of a series of unprecedented events and market volatility.
Growth Japan Fund
Comgest’s growth Japan fund was the top choice in our Japan equity award category, given its consistent stellar performance and strong investment conviction.
The strategy was among the top three for its information ratios over one, three and five years, according to eVestment. It demonstrated the ability to generate alpha by consistently outperforming its benchmark, the Tokyo Stock Price Index (Topix).
The fund is an all-cap, quality growth strategy seeking to provide retail and institutional investors exposure to some of Japan’s leading companies. The investment conviction is expressed through its concentrated portfolio of quality growth stocks with earnings per share (EPS) growth higher than that of Topic index constituents, over a five-year horizon.
The strategy is led by Chantana Ward, Richard Kaye and Makoto Egami. Ward and Kaye have worked as a duo on Comgest’s Japan equity strategy for the past 11 years and have each been investing in Japan for over 20 years. Egami joined the team in 2013.
ASIA EX-JAPAN EQUITY
Morgan Stanley Investment Management
Morgan Stanley Investment Funds Asia Opportunity Fund
The Morgan Stanley Investment Funds Asia Opportunity Fund won our Asia ex-Japan equity category award for the second consecutive year. We attribute the success to its robust performance and adoption of environment, social and governance (ESG) investing.
According to eVestment, the fund ranked among the top for its Sharpe ratio and information ratio over one, three and five years for its peers with similar fund size. It also posted an impressive one-year return of 53.37% last year.
The fund seeks long-term capital appreciation by investing in high-quality established and emerging companies located in Asia (excluding Japan) that are undervalued at the time of purchase. The investment process also integrates analysis of sustainability with respect to disruptive change, financial strength, environmental and social externalities and governance.
Kristian Heugh has managed opportunity strategy portfolios since July 2006, including the Asia opportunity strategy since its inception in 2015. It is co-managed by Anil Agarwal.
Aberdeen Standard Investments
Chinese A-share Equity Fund
Aberdeen Standard Investments’ Chinese A-share equity fund earned the China A-shares award category this year for its consistent ability to identify undervalued stocks and beat the benchmark.
The vehicle has outperformed most of the peers in the category over one, three and five years, according to eVestment. It has beaten benchmark MSCI China A Onshore Index by 15.6 percentage points since inception.
Positioned to take advantage of key areas of structural growth in China’s economy, the fund aims to achieve a combination of growth and income after rigorous proprietary research. Its focus on quality has enabled it to gain higher returns relative to the benchmark in falling markets as well as most rising markets. Portfolio turnover is low.
Nicholas Yeo, Pruksa Iamthongthong, Elizabeth Kwik and Jim Jiang are managing the fund in collaboration with a team of portfolio managers and analysts spanning Hong Kong, Shanghai, London and Singapore, as the fund house runs a team-based structure.
REAL ESTATE INVESTMENT TRUSTS
TIAA-CREF Real Estate Securities Fund
Nuveen’s TIAA-CREF real estate securities fund has delivered satisfactory returns when investment sentiment in commercial real estates plummeted amid the pandemic, thus winning our real estate investment trusts award category.
It has posted strong Sharpe and information ratios last year, particularly when many of its peers posted negative returns in 2020.
The fund seeks to obtain a favourable long-term total return through both capital appreciation and current income, by investing primarily in equity securities of companies principally engaged in or related to the real estate industry. It is actively managed using a research-oriented investment process with a focus on cash flows and asset values.
It typically invests at least 80% of its assets in real estate securities, including those companies that own significant real estate assets. It may invest up to 15% of its assets in real estate securities of foreign issuers.
It is managed by David Cop and Brendan Lee, who have over 20 years of industry experience.
Enhanced Index Share Fund
AMP Capital’s enhanced index share fund won our smart beta category award for its steady investment performance and distinctive investment approach.
It has delivered stable returns with low tracking errors over one, three and five years, based on eVestment data, while the returns of its peers fluctuated greatly over the years.
The fund provides investors with access to a portfolio of shares listed on the Australian Securities Exchange, with diversification achieved primarily through investments across a range of industries and issuers. It holds active positions focusing on large capitalisation stocks.
It uses an ‘enhanced index’ approach that gives higher risk-adjusted returns than would be achieved through investment in a pure index fund. The potential for total returns above its benchmark is achieved by combining strong risk controls and active management.
Investors benefit from a quantitative stock selection model which seeks to capture stock specific risks that traditional quantitative methodologies can overlook.