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Jupiter Asian Fund sets its sights on intra-regional trade
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Stocks capable of benefiting from growth in intra-regional trade in Asia are forming the core of Jupiter's reconstructed Asian Fund.
The £38m Fund, previously known as the Jupiter Far Eastern unit trust, transferred the Japan element of its portfolio to the Jupiter Japan Income Fund on 20th October, following a successful unitholder vote on 13th October*.
Philip Ehrmann, who recently joined Jupiter from Gartmore to launch the Jupiter China Fund and who is now managing the Jupiter Asian Fund, has positioned the portfolio to focus on intra-regional trade in the belief many of Asia's domestic economies are benefiting from growth in disposable incomes and higher consumer spending.
He says: "The US economy is slowing as consumers start to adjust to the end of the housing boom. In the past this would have had a significant impact on Asia as the region's growth was dependent on demand for exports from the US.
"This is no longer the case. While some Asian economies, such as Taiwan, are dependent on exports, much of the recent growth in economies such as China and Malaysia is being driven by domestic demand. Asia is a very dynamic region with consumer spending showing faster growth than Western economies. So, while Asia will undoubtedly be affected by a slowdown in the US, it will not be by as much as people expect.
"An example of the type of stock we would expect to benefit from this trend is Noble Group. This company, which is listed in Singapore, provides global supply chain management services for agricultural, industrial and energy products. It is gaining substantial benefit from the increase in trade across the region."
Philip is holding a concentrated portfolio of between 40-50 stocks, and in addition to the consumer discretionary sector, is overweighting industrials and materials. Significant underweights include financials and IT. Geographically, he is favouring China, Malaysia and Singapore and is underweight in Korea and Taiwan.
In contrast to a number of other funds in the sector, The Jupiter Asian Fund will have limited exposure to Australia - while there are selected commodity stocks listed there that are attractive as a play on Asian demand, Philip believes that as a developed market, Australia will not have the growth rates associated with the rest of Asia. Overall, therefore, he does not believe the market is an appropriate investment for an Asian fund.
Philip says: "I have not made wholesale changes to the portfolio since taking over as Simon Somerville and Ben Surtees share my view on markets. I have added a couple of new names to the Fund, including Aditya Birla Minerals, a stock listed in Australia which is about to start up a new copper mine. In addition, I have added Angang New Steel, a Chinese company listed in Hong Kong."
- ENDS -
Notes to editors:
* The proposals to reconstruct the Jupiter Far Eastern Fund received 96% approval from investors. Unitholders now have their existing holding split between the Jupiter Japan Income Fund and the Jupiter Asian Fund.
The investment policy of the new Jupiter Asian Fund has been changed to remove specific reference to investment in Japan. At the same time, it has clarified that the territories covered by the fund may include India, which Jupiter believes offers excellent investment opportunities.
The Jupiter Asian Fund is now listed in the IMA Asia Pacific excluding Japan sector.
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