HEAD-TO-HEAD: First State vs Value Partners

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Luke Ng, FE Advisory Asia

Income has long been the catchword for Asian clients of private banks and wealth managers.

In 2017, seven out of the top ten asset-gathering Hong Kong-domiciled funds had an income strategy that provides exposure to high dividend investments under either a mixed strategy or single asset class approach, FSA reported earlier.

Luke Ng, senior vice president at FE Advisory Asia, agreed that the dividend-yielding strategy that pays out regular income is in strong demand in Asia.

He said high dividend equity funds are for equity investors who also want a degree of downside protection.

Moreover, he expects stable economic growth across emerging Asia will continue to support the region’s stock markets.

“Long term structural change in the region provides a lot of investment opportunities. As this year has begun with higher volatility, it should be a favorable environment for dividend strategies.”

But he noted that investors should be mindful of the political events in the region. “Most of Asia is still considered a emerging markets. Political uncertainties remain the major risk. Investors with an exposure to Asian equities should be aware of the impact that the China-US trade dispute, Korean peninsula events and the new government in Malaysia could bring,” he said.

The strengthening of the US dollar can also have a negative impact on emerging market assets, he added.

Against this backdrop, FSA asked Ng to provide a comparative analysis of the First State Asian Equity Plus Fund and the Value Partners High-Dividend Stocks Fund.

Source: FE. * Excluding performance fee

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