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5 Top Rated Asia Equity Funds

Looking to add Asia allocation to your portfolio? These five funds are top rated by Morningstar analysts, earning either a Gold, Silver or Bronze Medal Rating

Morningstar Manager Analysts 11 July, 2017 | 11:12AM

This article is part of the Morningstar's Guide to Emerging Market Investing. Click here to find out just what an emerging market is and which regions hold the potential to boost your investment portfolio.

BlackRock Global Fund Asian Dragon

BGF Asian Dragon remains an attractive investment proposition, though it comes with a few caveats. 

Veteran manager Andrew Swan has managed the fund since he joined BlackRock in August 2011. He is an astute investor, as seen from his stellar track records on his Asia Pacific equity mandate at former employer JP Morgan.

Swan adopts a style-agnostic investment process which combines top-down and bottom-up analysis, with the aim to outperform in different market conditions. While he has implemented such process over a full market cycle and used it to good effect, the process heavily relies on him to set style preferences and execute at the right time. 

Our conviction in Swan, a market-cycle tested investment process and a solid long-term track record has led us to maintain the fund’s Morningstar Analyst Rating of Bronze.

First State Asian Growth

First State Asian Growth is a strong all-rounder giving investors plenty of food for thought. We’ve come to see the team at FSSA, led by Martin Lau, as one of the best in the region, and this view was reinforced by the smooth de-merger from First State Stewart in July 2015. 

A consistent approach is applied across the strategies managed by FSSA--robust bottom-up, patient research that looks for stocks on the basis of perceived quality, the ability to deliver sustainable and predictable growth, and a strong management team. This process has earned its spurs across market cycles, proving particularly adept in times of market distress, due to the absolute return mindset of the firm. The fund earns a Morningstar Analyst Rating of Silver.

JOHCM Asia ex-Japan

JOHCM Asia ex Japan is a truly index-agnostic portfolio whose increasing appeal lies squarely with an impressive portfolio manager. 

The strategy here is distinctive. Detailed stock-level research focuses on firms that boast sustainable long-term growth, an ability to consistently generate high returns on capital, and resilience during economic downturns. The end portfolio is truly index-agnostic, with a structural bias towards areas such as telecoms, gaming, healthcare, and consumer-related names.

We believe the fund is a truly strong choice and have awarded it with a Morningstar Analyst Rating of Silver.

Schroder Asian Opportunities

Robin Parbrook, head of Asian ex Japan equities at Schroders, lead manager of Schroder ISF Asian Opportunities, which has a Morningstar Analyst Rating of Gold, has announced that he will be leaving Hong Kong and returning to the UK for family reasons before the end of the year. He will be working out of Schroders’ London office and is expected to visit Asia every quarter. 

This move has resulted in a number of notable changes. Parbrook has already begun transitioning the management of the Schroder ISF Asian Opportunities strategy to Toby Hudson, and Hudson will officially become its lead manager on 1 January 2018. Hong Kong-based Hudson comes with strong credentials, having dedicated his 25-year investment career to Schroders. He has demonstrated his investment acumen on the Silver-rated Schroder Asian Growth and the Silver-rated Schroder ISF Hong Kong Equity. He has worked closely with Parbrook on the core Asian strategy for over a decade, and we believe him to be an apt replacement. 

T Rowe Price Asian ex-Japan

T. Rowe Price Asia ex Japan is a proven and solid strategy, one that gets our tick of approval. 

There is strength here across multiple pillars by which we judge a fund, not least the people. Portfolio manager Anh Lu boasts a wealth of experience and is someone whom we hold in high regards.

The process is another positive here. Lu prefers firms that are industry leaders with strong earnings prospects and have the potential and scope for multiple expansion. Detailed research is undertaken at both the industry and company level. Lu has wide latitude in terms of active weights at country and industry level and has shown a willingness to do so, although bet sizes have moderated in the past few years. The fund holds a Morningstar Analyst Rating of Bronze.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
BGF Asian Dragon D246.10 USD-0.20
First State Asian Growth I Acc44.48 USD-0.11
JOHCM Asia ex-Japan A GBP Inc2.19 GBP-0.23
Schroder ISF Asian Opp C USD Acc23.64 USD0.03
T. Rowe Price Asian ex-Japan Eq A USD14.93 USD-0.06
About Author Morningstar Manager Analysts

Morningstar Manager Analysts  research and rate hundreds of OEICs, unit trusts and investment trusts available for sale in the UK.