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.
“Accumulate bull market corrections caused by US policy volatility”Market Review and Outlook ASEAN markets rose 0.4% (in USD terms) sustaining at 2-year highs. The market's advance was led by Thailand especially retailers and energy stocks. Thai retailers are expected to report faster same-store sales growth supported by policy stimulus ahead of elections in 2018. Energy stocks rose from higher oil prices in anticipation of OPEC maintaining production caps in 2018. ASEAN capital market volatility could increase in 4Q17 on higher bond yields and USD strength from US policy change: earlier-than-expected rate hike in December 2017, central bank balance sheet tapering and tax cuts. Stock market corrections however should be accumulated since underlying fundamentals are expected to remain intact, namely, faster non-inflationary growth in 2018 supporting the market uptrend from bear market lows since January 2016. Portfolio Strategy The ASEAN Fund gained 0.7% (in USD terms) outperforming the benchmark by 0.3% pts. Overweighting Thailand and energy stocks added value while underweighting financials detracted value. The fund increased Singapore banks and upstream energy stocks. Singapore banks should benefit from tighter capital markets in 4Q17 as majority of interest-earning assets are linked to interbank rates. Oil producers and equipment fabricators benefit from higher oil prices if OPEC and Russia maintain production discipline in 2018. Singapore REITs were sold as valuations are unattractive in an environment of rising bond yields. Technology companies serving the Apple supply chain were sold as they have already priced-in earnings contribution from new iPhone models.
Share class (K-EUR)
(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.