AJ Bell has recently recognized the FSSA Asia Focus fund, adding it to their recommended Favourite Funds list. This inclusion expands AJ Bell’s portfolio of backed Asia funds to six, reflecting a growing confidence in Asian markets.
About the FSSA Asia Focus Fund
The FSSA Asia Focus fund is managed by experienced finance professionals Martin Lau and Rizi Mohanty. Lau has been leading the fund since 2015, while Mohanty joined the team in the previous year. With assets totaling £449 million, the fund has posted impressive long-term performance, boasting a 154% increase over the past decade. This positions it in the second quartile among its peers in the IA Asia Pacific Excluding Japan sector.
Investment Philosophy
AJ Bell research analyst Alex Wickham praised the fund’s disciplined investment philosophy. He highlighted the emphasis on selecting “quality businesses,” which involves identifying companies with strong management, solid balance sheets, and effective capital allocation. The fund managers seek firms with:
- Pricing power
- Competitive advantages
- Strong cash generation
- Low debt levels
The portfolio typically contains 40 to 70 companies and currently shows an overweight position in China and India, the two largest economies in Asia.
Performance Overview
While the FSSA Asia Focus fund has delivered strong long-term results, recent performance has been less encouraging. Over the past three years, the fund has gained only 20.1%, ranking it in the fourth quartile of its peer group. Additionally, it has struggled over the one-year and year-to-date periods, placing it among the bottom 25% of its sector.
Recommendations and Market Position
Despite the recent downturn in performance, AJ Bell remains confident in the fund’s potential. The firm joins Hargreaves Lansdown in recommending FSSA Asia Focus to clients. Analysts at Hargreaves Lansdown comment on First Sentier’s strong investment history in the Asia Pacific region, noting a disciplined approach that has served investors well.
Furthermore, Titan Square Mile has given the fund an ‘AA’ rating. However, they caution that fluctuations in investor sentiment and market volatility could lead to times when the fund underperforms compared to its peers.
Top Asian Equity Picks
The FSSA Asia Focus fund is now among AJ Bell’s top picks, alongside:
- Invesco Asian
- Jupiter Asian Income
- Schroder Asian Alpha Plus
For passive investment options, AJ Bell recommends the HSBC MSCI China and the Vanguard FTSE Developed Asia Pacific Ex Japan ETF, rounding out their key recommendations in the region.
