With bullish statements from the Beijing government about China’s economic outlook, the Far East has been showing signs of a sharp V-shaped recovery from the coronavirus crisis. As the first region to be hit by the virus, market watchers have taken a keen interest in how it fares for broader indications about the global economy.
Teera Chanpongsang, who manages the Fidelity Asia fund believes that Covid-19 will have a maximum of one-year negative influence on business activity, with less impact on certain areas. He suggests investors undertake proper research to spot the resilient businesses who may be best placed to take advantage of any recovery.
Rigorous research has stood Chanpongsang well in his role as a fund manager. Fidelity Asia has delivered just under 70% growth in the past five years, compared with 48% for the relevant index. His investment strategy is to bore deep into the company data, looking beyond the headline figures to the fundamentals. He seeks out companies that he believes are trading below their intrinsic value, with a set of improving fundamentals that have not been recognised in the share price. Because the Asian market is still relatively unknown to investors beyond the region, he believes there are more gems to be discovered than in the more widely researched US, UK and European markets.
With a style that is summed up as ‘growth at a reasonable price’, Chanpongsang pays close attention to a company’s management. Of particular interest is how that management treats minority shareholders. It’s an approach that has enabled the fund to invest in market leaders at an early stage of their development, when other fund managers remained cautiously invested in established names.
Fidelity Asia is broadly diversified at a national and sector level, and it includes some of the biggest names in the region including, Tencent Holdings, Taiwan Semiconductor Manufacturing and Alibaba Group. 25% of the fund is invested in Hong Kong, with 14.2% in mainland China and 12.2% in India.
Asia’s market fluctuations can make for choppy waters for investors. Chanpongsang invests in competitively priced companies with good fundamentals that he believes can deliver in the long term. He’s a calm, forensic presence in an exciting regional market.