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.
“ASEAN bull market to sustain in 2018 on Goldilocks growth and attractive valuations”Market Review and Outlook ASEAN equity ended calendar year 2017 at 2-year highs. The market's low volatility uptrend sustained on an improving growth outlook for 2018 and accommodative monetary policy in the absence of inflationary pressures. Indonesia was the strongest performer from valuation expansion and lower credit risk after Fitch further upgraded the country's investment-grade credit rating. ASEAN equity is targeted to achieve double-digit returns in 2018 on Goldilocks growth and attractive valuations. Accommodative monetary policy in the absence of inflation risk supports faster earnings growth and positive earnings revisions. Current mid-cycle equity valuations have not fully priced-in stronger growth fundamentals in 2018. Portfolio Strategy The ASEAN Fund gained 3.5% (in USD terms) underperforming the benchmark by 1% pts. Underweighting Indonesia and consumer staples detracted value. Bank stocks were increased to become the fund's largest overweight. Domestic demand should improve in 2018 from stronger export growth, commodity prices and capital markets in 2017. Domestic growth and higher interest rates should benefit the banks the most with profits rising from wider interest margins and lower bad debt provisions. Energy stocks were reduced as oil prices have already priced-in OPEC production cuts in 2018 and price rises are restrained by supply-response from higher US shale oil production.
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.