Legg Mason Investments has introduced the Legg Mason Asia Pacific fund, an Oeic that invests in companies based in the Asia Pacific region, excluding Japan.
The fund will contain between 50 and 70 holdings and will be managed by Batterymarch Financial Management, a Boston-based subsidiary of Legg Mason. It has managed emerging markets portfolios since 1987 and in 1995, it became a subsidiary of Legg Mason.
The lead fund manager, David Lazenby, will take a bottom-up approach to stockpicking. He will look for companies that dominate their particular markets, with above average growth and reasonable stock valuations. Approximately 500 stocks in the Asia Pacific region on a daily basis to rank the relative attractiveness of stocks.
The investment team supplements these rankings with primary research. They meet around 350 companies a year to get an idea of how each business is run and the quality of management. This helps to generate a list of stock ideas for possible inclusion in the portfolio.
Emerging Asia is looking ripe for investment partly because it has benefited from the West's tendency to outsource. The costs of labour and production are low within the region and outsourcing has created jobs in areas such as customer services. This has led to a growth in domestic consumption, with countries such as India and China producing goods for their own country, not only for export.
However, the Asia Pacific region can be highly volatile and investors who are attracted by its rapid growth rate, relative to the West, will need to take this risk on board.
According to Standard & Poor's the Legg Mason Japan equity fund is ranked first out of 60 funds based on £1,000 invested on a bid-to-bid basis with net income reinvested over three years to February 2, 2004.