The MSV Fidelity Asian Special Situations Fund aims to achieve long-term capital growth from a diversified portfolio of investments in companies that are seen as being “special situations” in Asia, excluding Japan.
Joseph Tse, the portfolio manager for the last five years, seeks to incorporate “special situations” – theme investing, deep value, turnaround and recovery stories in the fund. He obtains fund ideas primarily from Fidelity’s research analysts and through company visits, which includes some four hundred plus companies a year, making him one of the most active portfolio managers in the region. Joseph continues to find interesting opportunities among smaller companies in the region as a direct result of his active company visit schedule.
Under Joseph’s tenure, the fund has continued to deliver an exceptional performance. As at 30 September, the fund has returned an annualised performance of 25.1 per cent and 23.7 per cent over three years and five years respectively, and achieved first quartile ranking over all reporting periods of one year, three years, five years, 10 years and since inception – on 3.10.94.
The fund currently enjoys a 5-star rating (the highest possible) from Standard & Poor’s. Joseph tends to choose companies with good free cash flow generation, attractive dividend yields and competitive business models. Examples of companies included in the portfolio are businesses in a recovery situation, launching a new product, undergoing restructuring or introducing new management.
Some current examples of “special situations” in the fund include:
M&A Activity – several small Hong Kong banks have appreciated in share price value over
the year, given ongoing industry consolidation. Improving loan growth and expansion into
the consumer finance space has made them increasingly attractive and especially sought after by banks in Taiwan and mainland China.
Health Care – private hospitals located in Southeast Asia (eg Malaysia, Singapore and Thailand) are being chosen by foreign medical tourists to take advantage of the increasing number of quality health care facilities that offer intensive and traditionally expensive treatment for heart diseases, as well as plastic surgery and eye laser procedures, at cheaper prices.
Alternative Energy – the use of diesel engines (and biodiesel) as an alternative to gasoline engines has been growing in strength, given increased environmental concerns, elevated gas prices and demand for improved fuel efficiency. This development results in beneficiaries in the metal and agriculture sectors.
Investors who are interested in investing in this and other funds can do so via the unit-linked policies offered by Middlesea Valletta Life.