Respondents to Fund Selector Asia’s Asset Class Research in December 2017 indicated a significantly higher interest in Asia-Pacific ex-Japan equities than three months earlier.
The survey, which FSA conducts quarterly, asks fund selectors in Hong Kong, Singapore, Thailand and Malaysia about their long-term intentions around asset allocation to a range of asset classes.
Asia-Pacific ex-Japan equities stood out as the asset class with the highest net number of potential buyers. The number is calculated as a difference between the percentage of respondents who said they would add to their allocation and of those who said they would reduce it in the following 12 months.
Data: FSA
Asia-Pacific ex-Japan equity funds domiciled in Luxembourg, the United Kingdom, Ireland and Hong Kong – the four largest markets most relevant to Asian investors – had a total AUM of $167.1bn at the end of November 2017, according to data from Morningstar. In the first 11 months of 2017, they saw net inflows of $3.56bn.
The sector performed very well in 2017, with all funds available for sale to investors in Hong Kong and/or Singapore delivering positive returns. The best one, the Morgan Stanley Asia Opportunity Fund, registered for sale in Singapore, finished the year with a 73.3% gain, with several other funds delivering returns above 50%.
In Hong Kong, among the 123 funds in this category authorised for sale, growth funds from Barings and JP Morgan topped the list.
Top 5 best performing Apac ex-Japan equity funds in Hong Kong in 2017
| Fund | 1-year Return |
|---|---|
| Baring Asia Growth | 57.84% |
| JP Morgan Asia Growth | 55.52% |
| AB (HK) Asia ex-Japan Equity Portfolio | 54.71% |
| Baring Eastern Trust | 54.50% |
| Invesco Asia Consumer Demand | 52.21% |
Top 5 best performing Apac ex-Japan equity funds in Singapore in 2017
| Fund | 1-year Return |
|---|---|
| Morgan Stanley Asia Opportunity | 73.30% |
| Barclays Global Access Pacific Rim (ex-Japan) | 60.25% |
| Melchior ST Asian Opportunities | 57.90% |
| Baring Asia Growth | 57.84% |
| JP Morgan Asia Growth | 55.52% |
It was indeed a strong year for this category. Even funds at the bottom managed to eke out double-digit returns during the year.
Worst performing Apac ex-Japan equity funds in Hong Kong in 2017
| Fund | 1-year Return |
|---|---|
| Fidelity Asian Smaller Companies | 21.57% |
| Schroder ISF Asian Smaller Companies | 21.06% |
| First State Singapore & Malaysia Growth | 20.87% |
| JP Morgan Asia Equity Dividend | 20.49% |
| Aberdeen Global Australasian Equity | 19.55% |
Worst performing Apac ex-Japan equity funds in Singapore in 2017
| Fund | 1-year Return |
|---|---|
| UBS (Irl)MSCI Australia Ucits ETF | 19.59% |
| Aberdeen Global Australasian Equity | 19.55% |
| CIMB IAM (IE) Islamic Asean Equity | 19.54% |
| JOHCM Asia ex Japan Small and Mid Cap | 17.86% |
| UOB United Asean Income | 16.43% |
