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Mutual appreciation

Old Mutual appointed Suresh Sadasivan about a year ago to run its Asian select fund. He has had considerable experience in the emerging market sectors with Old Mutual and has since improved the performance of the fund hugely relative to his peers.

Of the 70 non-single country Asian funds, his fund’s performance is now fourth in its sector over one year to October 29. The fund is up by 72.9 per cent compared with only 55.9 per cent for the whole sector.

Suresh has achieved this result in such a short time by cutting the fund’s former exposure to US consumers and companies relying mainly on exports, including most technology companies. He has reinvested the proceeds largely in the domestic consumption, natural resources and companies providing infrastructure.

He has achieved superior performance by choosing the countries with the most potential and then choosing the best value shares in the sectors most likely to perform well.

Suresh favours invest-ment in China and India at the moment. In China, he believes that local liquidity conditions will remain favourable for shares and in India he believes that many large and mid-cap stocks are still undervalued.

In the future, he will also invest in sectors benefiting from low interest rates such as property in China and Hong Kong.

The geographical split of the fund in October was around 34 per cent in China, 21 per cent South Korea, 11 per cent Singapore, 10 per cent Australia, 6 per cent Taiwan and 4 per cent each in India and Malaysia.

The investments are widely spread, with no individual share exceeding 3 per cent of the fund. The biggest holdings are China Life, Hang Lung, Lihir Gold, Bumi Resources, SK Corp and CNOOC.

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