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Asia Pacific
mcminvest
Posted: 15 May 2018 16:35:40(UTC)
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Hi All,

Could somebody recommend an Asia Pacific Fund please? Won't take it as advice etc. just info. Have no Asia at the moment and want to start off. From research I think I should go with managed which i am happy to do. Will put in my ISA. Thanks!!
King Lodos
Posted: 15 May 2018 16:57:23(UTC)
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The only one I'd be happy to stick with would be Vanguard Emerging Markets Index .. Which is mostly Asia.

I'd say anything else would be likely to come in and out of favour a bit – and maybe sometimes a lot .. which creates problems, because rotating or trading Asia/EM is haphazard at best.

Having said that, Baillie Gifford Pacific has been a good holding for me for a while .. I used to be a huge fan of First State (now Stewart) Asia Pacific Leaders – but re: going out of favour, it seems that approach has had a few down years now .. I worry Baillie Gifford may suffer the same fate, as there's a lot of momentum in their portfolios (which can reverse eventually).
4 users thanked King Lodos for this post.
mcminvest on 15/05/2018(UTC), Alan M on 16/05/2018(UTC), Richard_L on 16/05/2018(UTC), North Star on 19/05/2018(UTC)
Dan L
Posted: 15 May 2018 17:11:45(UTC)
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I assume you want ex Japan. My wife has Veritas Asian in her pension. Giant and large cap, mix of emerging and developed (China, India, South Korea, Australia), 44 holdings.
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mcminvest on 15/05/2018(UTC)
Abstract Artist
Posted: 15 May 2018 17:13:18(UTC)
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Hi mcminvest, I would second that Baillie Gifford Pacific fund mentioned by King Lodos - run by an excellent team, it has a large weighting to Vietnam which is quite rare in this sphere, and it is also quite tech orientated.

A big plus for me is that the managers Roderick Snell and Ewan Markson Brown are heavily invested in the fund themselves and have recently topped up their investments.

Another good fund to consider is the Smith & Williamson Far Eastern Income and Growth which is run by the very capable Jane Andrews, and has been for over 16 years - this one also includes a large weighting in Japan, including over 2% in Japanese robotics company Fanuc - they of the famous yellow industrial robots seen in plants around the world. Jane has some very impressive figures over 10 years of 178% return.

Fees on both funds are well below the sector median and are exceptional value in my book, BG Pacific ocf is circa 0.74% and the S&W fund ocf is 0.76%.

They tick a lot of boxes if you are looking for funds for Far East exposure.
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mcminvest on 15/05/2018(UTC), Richard_L on 16/05/2018(UTC)
Tom Bards
Posted: 15 May 2018 17:16:14(UTC)
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Baillie Gifford Pacific
Pacific Horizon
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mcminvest on 15/05/2018(UTC)
JohnW
Posted: 15 May 2018 17:18:55(UTC)
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I hold two IT's in that area, SOI and FAS
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mcminvest on 15/05/2018(UTC)
Keith Cobby
Posted: 15 May 2018 17:33:50(UTC)
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Long term holds: Pacific Horizon (for growth), Henderson Far East Income (which I have reduced a bit recently).
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mcminvest on 15/05/2018(UTC), John Grant on 22/05/2018(UTC)
mcminvest
Posted: 15 May 2018 17:42:19(UTC)
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Dan L;62363 wrote:
I assume you want ex Japan. My wife has Veritas Asian in her pension. Giant and large cap, mix of emerging and developed (China, India, South Korea, Australia), 44 holdings.


Hi Dan, Yes! Ex Japan should of pointed that out! Thanks! I have Baillie Gifford Japan already
chubby bunny
Posted: 15 May 2018 17:46:34(UTC)
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Invesco Perpetual Asian or Old Mutual Asia Pacific, though if you already hold an Emerging Markets fund there will be a fair bit of overlap with the Asia Pacific sector.
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mcminvest on 15/05/2018(UTC)
Tom Mozy
Posted: 15 May 2018 18:43:30(UTC)
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Old mutual asia pacific. Uses a quant strategy so doubt it will underperform for ages like first state asia pacific leaders, but may not outperform.

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mcminvest on 15/05/2018(UTC)
c brown
Posted: 15 May 2018 20:49:50(UTC)
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Pacific Horizon for growth. But on a 3% premium. 10% Vietnam. No dividend.

JAI on 10% discount with 2.95% dividend. Growth & income.
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mcminvest on 16/05/2018(UTC), Mike L on 20/05/2018(UTC)
martin hargan
Posted: 16 May 2018 16:43:54(UTC)
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SOI Schroeder Oriental Income


And HFEL

Henderson Far East.

I prefer the smaller income from SOI.

Compare on the THEAIC STATS.

For Emerging types
I like Blackrock Frontier good record including five year dividend increase and excellent managers.


All the above have reasonable charges.see the AIC stats.
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mcminvest on 16/05/2018(UTC)
Dian
Posted: 19 May 2018 01:52:07(UTC)
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I wish if there had been sector oriented funds like consumer staples, internet and education and infrastructure for Asia pacific region as they are going to have the fasted growing population region as well as the fastest growing middle class population. I prefer sector based funds as some countries and regions have immense potential in sectors like above. It is known fact that the USA has the vibrant tech sector where as others have other vibrant sectors. On top of that there are growing sectors like agriculture, consumer, internet and education in some regions. Other than individual Asian stocks I don't have any exposure to Asia Pacific funds yet.

https://www.telegraph.co...und-has-risen-30pc-year/
kWIKSAVE
Posted: 19 May 2018 06:47:50(UTC)
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I have fairly recent bought Baillie Gifford Pacific on KL's recommendation.
I will not touch it for years but will not add to it.

Also hold Invesco Perpetual Asian run by an experienced manager with good track record.
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King Lodos on 19/05/2018(UTC)
King Lodos
Posted: 19 May 2018 14:18:01(UTC)
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Just a disclaimer ..

I have a completely personal instinct that the Baillie Gifford approach may not be sustainable.

I certainly can't say for sure – I hold Pacific and Positive Change from them – and I like the companies and philosophy a lot .. But purely historically, 'hot' sectors and styles like this have been boom and bust .. There is an argument that this is a fundamentally different environment to invest in: that you need to be in disruptors .. Maybe .. It just depends whether history repeats, because we've always thought that .. So I still consider Vanguard Emerging Mkts Index that buy-and-hold option .. I'd be dumping BG funds as soon as cracks start to appear (relative to benchmarks)
Keith Cobby
Posted: 19 May 2018 14:49:15(UTC)
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I hold all of the BG trusts because I like their growth philosophy and their partnership structure. I cannot see a return to value in the foreseeable future. Interesting analysis from the US recently that a small minority of companies have been responsible for most of the market growth over the decades. BG have been very good to me since the financial crisis and certainly pleased to have switched out of various Aberdeen trusts which have had a terrible run over the last few years.
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Freddy4Skin on 19/05/2018(UTC), North Star on 20/05/2018(UTC)
King Lodos
Posted: 19 May 2018 16:14:28(UTC)
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Likewise, I don't like value as an alternative (with the exception of Eastern Europe, because prices are on the floor relative to everything else).

I think Baillie Gifford are doing something very right across their funds .. I'd guess they've got some kind of quant strategy behind the scenes informing managers – and I'd guess it's more momentum driven than we're used to.

Very similar style to Chase Coleman, of Tiger Group in the US:
https://whalewisdom.com/filer/tiger-global-management-llc#tabholdings_tab_link

My portfolio takes quite a cue from them: Microsoft, Facebook, Visa, Mastercard .. But the top holdings, JD and Amazon, I think are very difficult to value.


The risk with BG (just in my opinion) is that the tech business is not only full of disruptors, but is very prone to being disrupted .. Apple have *something* that keeps customers sticky .. Not been true of many others .. There were (I think) 3,000 motor companies in the US a century ago, and about 3(?) still exist .. There's virtually no hyped up or optimistically priced tech/discretionary business BG aren't heavily invested in .. It would be unusual if they all turned out to be winners.

And if you're paying >50PE for some of these, you kind of do need things to be different .. and maybe they are .. There's a good argument that Buffett's style is too 20th century, and misses disruptors .. I just wouldn't go all-in on BG's approach (at least without Stop Losses)

Tom Bards
Posted: 19 May 2018 16:37:51(UTC)
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King Lodos;62535 wrote:
Likewise, I don't like value as an alternative (with the exception of Eastern Europe, because prices are on the floor relative to everything else).

I think Baillie Gifford are doing something very right across their funds .. I'd guess they've got some kind of quant strategy behind the scenes informing managers – and I'd guess it's more momentum driven than we're used to.

Very similar style to Chase Coleman, of Tiger Group in the US:
https://whalewisdom.com/filer/tiger-global-management-llc#tabholdings_tab_link

My portfolio takes quite a cue from them: Microsoft, Facebook, Visa, Mastercard .. But the top holdings, JD and Amazon, I think are very difficult to value.


The risk with BG (just in my opinion) is that the tech business is not only full of disruptors, but is very prone to being disrupted .. Apple have *something* that keeps customers sticky .. Not been true of many others .. There were (I think) 3,000 motor companies in the US a century ago, and about 3(?) still exist .. There's virtually no hyped up or optimistically priced tech/discretionary business BG aren't heavily invested in .. It would be unusual if they all turned out to be winners.

And if you're paying >50PE for some of these, you kind of do need things to be different .. and maybe they are .. There's a good argument that Buffett's style is too 20th century, and misses disruptors .. I just wouldn't go all-in on BG's approach (at least without Stop Losses)




Out of interest which BG funds do you think have a PE of over 50?

For this thread,looking at Morningstar, Baillie Gifford Pacific has a P/E of 12.95 while LT Global has 22.16. Pretty big difference if Baillie Gifford is, as you say, all about momentum and high P/E companies.
King Lodos
Posted: 19 May 2018 17:07:47(UTC)
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I don't know how they calculate it .. If you look at SMT's top holding PE ratios (rounding):

Amazon – 200
Tencent – 50
Alibaba – 50
Tesla – 280
Illumina – 70
Baidu – 40

Morningstar afaik is only analysing the top 10 and give the fund 36 .. Now I don't know how you get 36 – it's certainly forward PE (which means growth estimates discounted .. and that's obv where I'd be cautious).

Bear in mind a Chinese company on a PE of 50 should be a US company on 100 (because there should be a risk premium).

BG Pacific is cheap enough for me to hold and recommend .. But knowing the stocks, there's a lot of optimism priced in .. With LT, you're in very different businesses, not on particularly optimistic valuations (apart from perhaps some of the Japan portfolio).
Tom Bards
Posted: 19 May 2018 18:20:09(UTC)
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King Lodos;62537 wrote:
I don't know how they calculate it .. If you look at SMT's top holding PE ratios (rounding):

Amazon – 200
Tencent – 50
Alibaba – 50
Tesla – 280
Illumina – 70
Baidu – 40

Morningstar afaik is only analysing the top 10 and give the fund 36 .. Now I don't know how you get 36 – it's certainly forward PE (which means growth estimates discounted .. and that's obv where I'd be cautious).

Bear in mind a Chinese company on a PE of 50 should be a US company on 100 (because there should be a risk premium).

BG Pacific is cheap enough for me to hold and recommend .. But knowing the stocks, there's a lot of optimism priced in .. With LT, you're in very different businesses, not on particularly optimistic valuations (apart from perhaps some of the Japan portfolio).


Good points. I must admit I do not know how they calculate it either, I was surprised that the Pacific was that low.

SMT does not surprise me really, it is certainly the most extreme in that sense of all their funds. Generally speaking, BG seem to be making all the right decisions at the moment across almost all their funds, most of them are, as you say, leaning towards growth but they do have some funds which are focused on being slightly more balanced.

I do think BG are the best fund house currently, my only issue with them is that they do indeed seem to have a propensity to get googly eyed about new concepts and technology. Tesla I still think is a mistake on this front but who knows.
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King Lodos on 19/05/2018(UTC)
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