Balancing quality & growth in Asian Equities
18 Aug 2020

Balancing quality & growth in Asian Equities


Market sentiment in Asia equities have been relatively subdued as a result of trade tensions in 2019. As optimism began to rise upon signs of easing trade tension in 4Q19, North Asia Equities have outperformed, playing catch up with US and other developed market. Coupled with relatively attractive valuation metrics such as higher free cashflow yield, low P/B also make the case for Asia Equities. In today’s yield-seeking environment, we think that dividend-yielding stocks also looks attractive due to their steady stream of cashflow and relatively lower volatility. To get access to these companies, we recommend the First State Dividend Advantage fund.

First State Dividend Advantage Fund

What are the Key Characteristics of this fund?

  • “Quality” style focusing on firms with competitive advantages and attention to corporate governance.
  • Diversified, larger-cap Asia ex-Japan equity portfolio with a focus on dividends.
  • While fund has no set dividend target, they are focused on stocks with future dividend growth and long-term capital appreciation potential.
  • Consistent distributions since inception.

Why this Fund? 3 Reasons:

  1. The Track Record: Launched over 15 years ago, the fund has returned ~11% p.a. (roughly +3% per annum above the reference index).
  2. The People: More importantly, the people who built the track record are still running the fund today. Twenty-year industry veteran Martin Lau has run the fund since inception.
  3. The Process: The fund focuses on First State philosophy of quality (strong management, franchise and robust financials).

Article credit: Fund Selection Team
Photo credit: Unsplash 


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