The new fund will focus on South-East Asian markets and equity markets of the ASEAN region. The conversion is said to be the result of growing demand from investors for opportunities in smaller, faster growing Asian markets.
Approximately 80 per cent of the new fund will invest in the core ASEAN markets of Singapore, Malaysia, Indonesia, Thailand and the Philippines. A tenth of the fund will invest in up-and-coming frontier markets such as India, Vietnam and Sri Lanka and the remaining 10 per cent will invest in markets with greater exposure to greater China including Hong Kong, Taiwan and the region itself.
The fund will be an Irish-domiciled unit trust managed against the MSCI South East Asia index. It will employ an actively managed strategy using a growth at a reasonable price investment philosophy. The number of fund holdings is expected to remain between 40 and 50.
Baring ASEAN frontiers fund manager SooHai Lim says: “The fund’s exposure to Greater China and the frontier economies allows investors to benefit from the changes taking place there. Vietnam, for example, is emerging as an attractive, low cost alternative to China for companies looking to diversify their manufacturing. With growth forecasts looking favourable, we believe Vietnam’s nascent equity market could well follow China’s meteoric rise.”