According to FE data, among the roughly 5,000 mutual funds available to Hong Kong and Singapore investors, only two products — the JP Morgan Asia Growth Fund and the Manulife Asian Equity Fund — have overweight positions in the top four constituents of the MSCI Asia ex-Japan index. The top four happen to be the region’s tech heavyweights: Tencent, Alibaba, Samsung Electronics and TSMC.
The two funds — which have had somewhat contrasting performance (chart below) — do not have excessive overweights to the four individual stocks. They tend to be lower than the average overweights of other funds that have taken top-heavy positions in some of the four Asian tech giants.
The exception is the JP Morgan fund’s outsized bet on TSMC, in which it has an 85% overweight holding compared to the average TSMC overweight of 60%.
In terms of numbers, Samsung Electronics has the most widespread appeal, with 128 funds overweight the stock.
In contrast, Tencent is the least popular of the four. Although it is the largest component of the index, few funds have taken an outsized bet. Only 46 funds are overweight the stock, which suffered severely in last year’s China market slump.
Top 4 Constituents of MSCI Asia ex-Japan Index
| Stock |
Country |
Float Adj. Mkt Cap ($ billions) |
Index Wt. % |
Sector |
| Tencent |
China |
251.93 |
5.62 |
Communications Services |
| Alibaba |
China |
218.38 |
4.87 |
Consumer Discretionary |
| Samsung Electronics |
South Korea |
199.69 |
4.45 |
Info Tech |
| Taiwan Semiconductor |
Taiwan |
177.21 |
3.95 |
Info Tech |
Source: MSCI, January 2019
Hong Kong and Singapore authorised mutual fund exposure
| Stock |
Number of funds o/w index |
Average weighting % |
Index weighting % |
o/w index |
| Tencent |
46 |
8.36 |
5.62 |
49% |
| Alibaba |
101 |
7.54 |
4.87 |
55% |
| Samsung Electronics |
128 |
6.82 |
4.45 |
53% |
| Taiwan Semiconductor |
86 |
6.31 |
3.95 |
60% |
Source: FE Analytics
Only 2 funds are overweight all four stocks
| JP Morgan Asia Growth % weight | o/w index | Manulife Asian Equity % weight | o/w index | |
| Tencent |
7.90 |
41% |
7.06 |
26% |
| Alibaba |
5.60 |
15% |
6.43 |
32% |
| Samsung Electronics |
6.50 |
46% |
6.71 |
51% |
| Taiwan Semiconductor |
7.30 |
85% |
5.53 |
40% |
Source: FE Analytics
JP Morgan Asia Growth Fund and Manulife Asian Equity Fund v MSCI Asia ex-Japan Index and Sector
