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.
“Active stock selection to mitigate contagion from US-China trade protectionism”Market Review and Outlook ASEAN markets were relatively resilient to contagion from US-China trade conflict and worries global growth will be undermined by an escalation of the conflict. The US-China trade dispute is not expected to escalate into a trade war although tit-for-tat trade sanctions are likely to persist in 1H18. ASEAN does not contribute significantly to the US trade deficit and is not at the forefront of the trade protectionism. Longer-term, ASEAN should attract more foreign investment with cost competitiveness enhanced by absence of import tariffs and increased urgency for China to grow intra-Asia trade. Short-term, ASEAN markets are likely to be more volatile as portfolio flows react to incremental US-China trade policy announcements. Active stock selection in companies with improving earnings fundamentals sold down on global macro should help to mitigate volatility risk. Portfolio Strategy Fund outperformance was achieved by overweighting petrochemical stocks and underweighting ASEAN markets most impact foreign fund selling: Indonesia and Philippines. Petrochemical stocks were increased at the expense of coal stocks. Petrochemical margins are likely to exceed market expectations in 1H18 helped by supply discipline from China environmental controls. Coal prices on the other hand have peaked with winter heating demand and inventory destocking. Stocks with positive idiosyncratic catalysts were added such as Indonesia retailers ahead of peak seasonal demand and festivities in 2Q18. Stocks with exposure to China final demand were reduced on de-rating risk from US-China trade tensions in 1H18.
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.