HEAD-TO-HEAD: Eastspring vs Henderson

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“The key difference of the two funds is the regional exposure,” Ng said.

The Eastspring product tends to have relatively higher exposure to emerging Asia, while the Henderson one has a primary focus on property equities in developed Asia, with Japan the largest allocation.

The Eastspring fund invests in Asia-Pacific excluding Japan, as indicated by its benchmark GPR Customized Asia Pacific (Ex-Japan) Property Index. Constituents are not known because it is customised, and hence hard to draw a useful comparison, Ng noted.

The manager, Pearly Yap, begins the investment process by screening the available universe for factors such as valuation and yield to create investment ideas. Then she will conduct further fundamental analysis to build her conviction among stocks.

“She also looks at stock-by-stock relationship in order to achieve diversification when building the portfolio. The process ends of with a portfolio of around 50 stocks,” Ng explained.

The portfolio results in about 80% of stocks in developed Asia, with the remaining exposure spread across emerging countries such as China, India and ASEAN. About 40% of the holdings are REITs, compared to Henderson’s 55%, Ng noted.

Top country exposure (as of Jan 31)

Source: Fund factsheets

The Henderson fund, in contrast, has about 40% of assets in the Japanese market, and the rest remain in developed territories, including Australia, Hong Kong and Singapore.

Portfolio manager Tim Gibson intends to stay close the country and sector allocation of the benchmark – the FTSE EPRA/NAREIT Pure Asia Total Return New Dividend Index.

“He focuses on bottom-up selection to pick high conviction stocks. Gibson developed a process that distills market information of a property equity and quantifies it into a single number that provides him with an idea of how individual stocks could perform.

“And from that he aims to build a concentrated portfolio of 20-to-30 stocks,” another distinct difference compared to the Eastspring fund, Ng said.

Still, Gibson has the discretion to invest into the stocks as he sees fit, Ng added.

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