For many years, Asia has been considered a reliable and exciting investment. In the past few years, in particular, the continent has been considered the potential driver of markets globally, now, and continuing into the future. The endless opportunities are unmatched elsewhere, with the Chinese and Indian economies looking to thrive as they become less reliant on exports from Western areas.
For the fund manager of Stewart Investors, David Gait, sustainability is one of the essential considerations when it comes to the process of stock selection. His fund is cautiously managed, only selecting the best quality mid to large-sized businesses. Companies looking to take the environment and global communities into account tend to have the best chance in their selection processes.
According to Gait and his team, assessing a business’s sustainability credentials is an efficient way of getting to know their stock management teams, which will prove to be vital in the future.
To do this, managers often visit websites in order to gather reference checks from both competitors and suppliers.
This approach allows managers such as David Gait to determine which companies are socially useful, providing services or products that will benefit society in some way. In this case, they will benefit from increasing levels of consumption regionally.
A good example of this approach is Marico, a company that manufactured coconut oil initially, before expanding into healthy foods. Sashi Reddy, a fellow fund manager of David Gait, saw the company to be “ahead of the curve and could see the need for Indians to evolve their consumption habits.”
He continued to say how Marco has a “good track record of building fantastic brands, of having an astute focus on profitability and the quality of ownership is fantastic as well. It’s companies like these that really attracts us.”
While this approach may not allow the fund to experience remarkable highs within the market, the careful and conservative methods should allow them to continue performing well even through negative peaks. This focus on capital preservation, accurate and thorough balance sheets, and top-quality, professional management should stand the fund in good stead.