The Sub-Fund's investment objective, over a recommended investment period of more than 5 years, is to grow net asset value by investing in companies registered predominantly in Asean Countries.
“Market corrections during the current growth-inflation sweet spot are buying opportunities”Market Review and Outlook ASEAN markets were flat at 2-year highs in July. The Financials sector performed the strongest especially Singapore and Philippine property stocks. Property sales volume in Singapore grew 72% in 1H17 and is a likely precursor for higher property prices. Property prices have fallen 12% since 3Q13 and buying momentum returned after tightening measures were eased in March 2017. Philippine office demand is supported by growth of online gaming. ASEAN is presently in the sweet spot of faster prospective growth and benign inflation. Market corrections are buying opportunities until interest rate expectations rise with inflationary pressures. ASEAN markets should also be relatively resilient since returns have lagged and foreign fund inflows to ASEAN so far are lower than other emerging markets. Portfolio StrategyThe ASEAN Fund was flat performing in-line with the benchmark. Overweighting property and technology added value while underweighting banks and energy detracted value. The fund added to growth surprises from Chinese policy change. China's travel ban to South Korea should divert more tourism to ASEAN while environmentally-enforced capacity cuts support higher aluminum prices and wider petrochemical margins in plastic polymer and polyester complexes. Funds were sourced from Indonesian property and construction stocks. Faster property sales from the tax amnesty scheme and fund repatriation is taking longer to be realized while contractors face dilution risk to finance working capital for new construction projects.
Share class (A-USD)
(1) The rating grades the funds on a scale from 1 to 7. This rating system is based on the average fluctuations of the net asset value over the past five years. It corresponds to the variation range of the portfolio upwards and downwards. If the net asset value is less than 5 years old, the rating is determined by other regulatory calculation methods. Historical data such as those used to calculate the rating may not be a reliable indication of the future risk profile. The current category is neither a guarantee nor an objective. Category 1 does not signify a risk-free investment.