Martin Lau smooths the choppy waters of the Asia Pacific

Martin Lau smooths the choppy waters of the Asia Pacific

Asian economies are widely expected to be engines of global economic growth over the coming decades. With growing populations, a strong manufacturing base, an expanding middle-class and the continued rise of China and India, the fundamentals are in place for the region to take an economic lead. But with concerns growing over China’s relative economic slowdown, Japan’s struggle with slow growth and deflation, as well as ongoing geopolitical tensions, it’s not a region for faint-hearted investors.

One man who has successfully navigated the sometimes choppy waters of the Asia-Pacific region is First State’s Martin Lau. As the lead manager of twelve of the investment company’s funds including the flagship ‘Asia Focus’ he has managed to consistently outperform his peer group over the long term when it comes to stock picking. Crucially, he’s achieved this against a backdrop of falling markets as well as in the good times.

Lau takes a ‘bottom-up’ investment approach. This focuses on the performance and fundamentals of individual businesses recognising that well-managed companies can, and frequently do, outperform the sector as a whole.

2019 was a difficult year for the region with ongoing trade tensions between China and the US acting as a brake on economic growth. This resulted in a number of Asia funds appearing in the lists of worst performers. That wasn’t the case with Lau’s funds. Asia Focus recorded a modest 2.57% decline over 2019 but is already over 17% up on its valuation last January with a 45% increase over the previous three years. Investing across the Asia-Pacific region, 17.84% of the fund is invested in India, with similar amounts being held in Hong Kong and Taiwan. It includes some big names in the region like Taiwan Semiconductor Manufacturing and HDFC Bank.

Lau takes a prudent approach to risk versus return, favouring companies with strong long term growth potential. This has meant that his funds have occasionally underperformed the benchmark slightly during bullish times, but have consistently outperformed the benchmark when pull-backs have occurred.

Lau’s record is built on a deep knowledge of the region combined with a prudent approach to stock picking.

Nick Price seeks out quality in emerging markets Why Yorkshire investors are turning to ethical investments