The fund will be benchmarked against the MSCI Asia-Pacific ex. Japan Index and will aim to yield around 10% above the index.
Kwan joined Fidelity in 2000 as an investment analyst and already manages the firm’s Asia Pacific Property Fund (since inception in 2007) and Asia Pacific Dividend Sicav (since 2010).
According to FE Analytics Kwan has overall performed worse than her peer group composite, and over a fairly lengthy track record has underperformed the peer group more often than not.
The graph below shows her overall performance against the peer group composite over five years.
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On the Asia Pacific Dividend Fund specifically, however, Kwan has top-quartile performance over three years and second quartile over one.
For companies to be considered for inclusion in the portfolio, Fidelity said they must pass three criteria:
- Strong free cash flow generation – the ability to deliver sufficient cash levels to comfortably cover current and future dividends.
- Scalable business proposition – a business model that is sustainable through all stages of the economic cycle.
- High quality management team – a team that has demonstrated a proven ability to deliver profits and long-term value to shareholders.
Income potential
The asset manager said while Asian is perceived as a region offering potential high capital appreciation, over 50% of the total returns of Asian Pacific equities have come from reinvested dividends.
In addition, dividend-paying stocks in the area have historically outperformed the broader Asian markets in both bull and bear markets.
Ben Waterhouse, head of UK retail sales at Fidelity, said: “In the current environment of stifled economic growth, the Asia Pacific region still offers attractive growth potential for investors. However recent market volatility has led investors to take a more cautious approach, resulting in significant demand for equity income products. An Asian dividend fund offers investors the best of both worlds.”
The group’s equity income suite also includes the Fidelity Global Dividend, Fidelity Moneybuilder Dividend and Fidelity Enhanced Income funds.
