F&C multi-managers Rob Burdett and Gary Potter have lifted exposure to Asian equities across their range after concluding a 1997-style crisis is not about to strike the region.
The duo, who run nine funds in their Navigator and Lifestyle ranges, recently moved from an underweight to neutral position on Asia by adding to existing holdings in the portfolios.
Asian equities have underperformed the developed world after concerns grew over the region’s economic momentum and possible tapering by the Federal Reserve. FE Analytics shows the MSCI Asia index rose just 0.87 per cent over the six months to 25 September, against the 4.14 per cent gain in the MSCI World.
Burdett says: “Although there is a chance Asia could get worse before it gets better, the valuations are quite compelling now. One of the concerns we had were whether the southern nations such as Indonesia were going into a crisis.
“All the people we have spoken to out there have done various analyses comparing now to the 1997 Asian crisis and they think it is a very different scenario now. Many of those countries have floating exchange rates that they didn’t have then, they have got huge foreign currency reserves and central bankers and governments that are much more aware having being through the 1997 crisis.”
Examples of the funds added to during the move include First State Asia Pacific Leaders, Coupland Cardiff Asia Alpha and Prusik Asian Equity Income, all of which are owned in their F&C MM Navigator Boutiques fund.
Nurture Financial Planning managing director Simon Linstead says: “Personally, I am a bit more pessimistic than this. I cannot see a huge resurgence in those markets in the immediate future.”