Teera Chanpongsang took over management of the Fidelity South East Asia Fund in January 2014. His investment style is similar to that of his predecessor, Allan Liu, meaning the fund continues to be focused towards high quality companies operating in industries with barriers to entry, which he believes can grow their earnings faster than their peers.
A number of changes have, however, since been made to the portfolio. Teera Chanpongsang has historically managed more concentrated portfolios and as such, the number of stocks held has been reduced considerably from 126 to 95. He also tends to be more sensitive to valuations, meaning he will only invest in businesses he feels represent good value.
Under his stewardship, the fund's exposure to financials has increased to 35.8% of the portfolio and is partly due to the manager's increasingly positive outlook for Chinese insurers. As the nation's wealth rises, Teera Chanpongsang believes there will be increased demand for insurance products in China. The insurance industry could also benefit from favourable government policies, with the introduction of tax benefits for health insurance companies acting as a tailwind. He believes current holdings including China Life Insurance and AIA Group are at the forefront of these changes. In the case of the latter, he expects the company could also benefit from its strong brand name and well-reputed management team.
Teera Chanpongsang has also introduced exposure to India to the portfolio. The fund has traditionally not invested in India as the country is not a constituent of the fund's benchmark, the MSCI AC Far East ex Japan Index. However, the manager views India as one of the most promising domestic stories in the region and has included off-benchmark holdings in a number of Indian companies. This exposure has added value over the past year and current holdings include HDFC Bank.
Going forwards, there is potential for the fund's weighting in India to increase further. On 1 March 2015, the fund's benchmark will change to the MSCI AC Asia ex Japan Index, which includes India whereas the current benchmark does not.
Our view on this fund
The Fidelity South East Asia Fund has grown by 17.3% under Teera Chanpongsang's management. This compares with 16.0%* for the average fund in the sector, though this is over a short period and is not a guide to future performance. All investments should be held for the longer term.
|Annual percentage growth|
| Feb 10 -
| Feb 11 -
| Feb 12 -
| Feb 13 -
| Feb 14 -
|Fidelity South East Asia||31.1%||-9.9%||10.9%||-5.2%||21.9%|
|IA Asia Pacific ex Japan||22.7%||-5.9%||14.7%||-6.6%||19.8%|
|MSCI AC Far East ex Japan||27.1%||-5.3%||13.9%||-6.6%||21.4%|
Past performance is not a guide to future returns. Source: Lipper IM* to 02/02/2015
In addition, Teera Chanpongsang has managed the Fidelity Emerging Asia Fund since April 2008, while he also previously managed a couple of country-specific portfolios. We view him as a competent and experienced fund manager, who is also able to draw upon Fidelity's vast pool of research analysts in the Asian region. That said, we currently believe there are a number of other fund managers investing across Asia with stronger track records over a longer period. This adventurous fund, therefore, does not currently feature on the Wealth 150 list of our favourite funds across the major sectors.
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