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Lloyd George Management, a specialist in Asian and emerging markets, has established five new Oeic funds for retail investors. One of the funds, the developed Asia fund, will focus on Australia, Hong Kong, New Zealand and Singapore.

The fund will be managed by chief investment officer for Asia Samir Mehta. Mehta joined Lloyd George in 1998 after managing private client money for ANZ in India and working as an analyst for Peregrine Securities.

Lloyd George’s investment team starts with a universe of 7,500 stocks which they will screen using factors such as price and valuation.

Mehta will select around 50 stocks for the developed Asia fund, looking at potential earnings growth, cash flow, balance sheet strength, management and valuation.

He will also consider what could go wrong, which enables him to understand the downside risk of each stock.

Each holding is given a target price and once this growth is reached, Mehta decides to increase the target price because further growth looks likely or sell the stock because the growth has peaked.

Australia currently dominates the portfolio with a weighting of around 65 per cent as Mehta believes it has benefited the most from Chinese demand for energy and other products.

Growth in emerging markets is outpacing growth in the West and valuations are reasonable on the whole. Although a developed emerging markets fund sits at the lower-risk end of the emerging markets spectrum, its stocks may still be less liquid and more volatile than Western companies, which represents a higher than average risk to investors.

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