Posted inAsset Class in Focus

Asia funds turn negative

Returns from nearly all Asia ex-Japan equity funds have moved into negative territory after the recent sell off in Asian equities.

China’s latest move to devaluate its currency, along with poor manufacturing data, which was the weakest in six years, has added to worries of a slowdown in the world’s second largest economy. The resulting market turmoil of the last few days has hit returns of equity funds.

Out of all Asia ex-Japan equity funds available for sale in Singapore and/or Hong Kong, over the last one month period just one product was in positive territory. CIMB Islamic Asia Pacific Equity showed a return of 2.5%, according to FE data.

The Malaysia-domiciled fund invests in Shariah-complaint companies in the emerging and developed markets of Asia Pacific ex-Japan. It has MYR175.7m ($41.5m) in assets under management.

About 90% of assets are in equities and 9.5% is in cash.

Hong Kong (24.5%), Taiwan (16%) and South Korea (11.7%) are the top country allocations. India and China had 11.5% and 9.1% weighting in the portfolio, respectively.

In the July factsheet, the fund manager said he is cautious on China-centric stocks and commodity and energy-related sectors.

“Hence, we are positioned in defensive growth areas such as emerging market telecoms and domestic consumption.”

The telecommunication and consumer sectors together accounted for nearly 43% of the portfolio, followed by financial companies (12.1%).

The fund’s top 10 companies account for 45% of its assets. Taiwan Semiconductor Manufacturing is the largest holding with a 9.4% weighting, followed by Taiwan’s Chunghwa Telecom and Hong Kong’s Link REIT.

Apart from Chunghwa Telecom, South Korea’s SK Telecom, Indonesia’s Telekomunikasi and Singapore Telecommunications were some other holdings in the telecom sector.

A look at the performance of the CIMB fund compared to its benchmark:


The worst hit Asia ex-Japan equity funds over the last one month:


Part of the Mark Allen Group.