15.11.2015

Investing in equities and equity-related securities of companies located in the Association of Southeast Asian Nations (ASEAN), the WIOF South-East Asia Performance Fund offers investors the chance to take advantage of growing economies and markets in one of the world’s most economically-dynamic regions. The Fund’s portfolio is managed by award-winning asset management group and Asian investment specialists CIMB.

 

WHY SOUTH-EAST ASIA?

With a growing young workforce, a rapidly-expanding middle class driving rising domestic demand and outperforming regional markets, the South-East Asia region is one no investor can afford to overlook. The Fund’s focus investment markets are some of the most dynamic economies in the world, each offering attractive fundamentals, including:

 

  • It is the third most populous area globally, being home to about 600 million people or 9% of the world population. By 2030, this is expected to rise to 710 million.
  • Within two decades, Southeast Asia will have a larger (and            younger) population Europe. The region’s demographics also provide the foundations for a strong future workforce - more than half of the population is less than 30 years old.
  • This growing young population includes an expanding rising middle class which will support the domestic economy - domestic consumption accounts for 67% of GDP and per capita GDP is approaching USD3,000.
  • The rising affluence of the workforce has strong implications for demand for life-style consumer goods and financial products. Meanwhile, wealth is being created – it is thought that as of 2015, the region was home to more than 450,000 high net worth individuals with a combined wealth of USD2.2 trillion.
  • At the same time, the market is increasingly liquid and the combined market capitalization of the five South East Asian markets – Singapore, Malaysia, Thailand, Indonesia and Philippines - is now USD2.1 trillion.
  • It is also Asia’s 3rd largest economy and complements China and India in Asia’s long term growth story.

 

As Ken Goh, portfolio manager for the WIOF South-East Asia Performance Fund, says: “The underlying fundamentals of the ASEAN region hold tremendous potential and growth opportunities.”

 

OUTPERFORMANCE

The Fund has capitalised on these fundamentals to deliver long-term outperformance. During the last five years it has repeatedly outperformed its comparative index, delivering an absolute return of 11.9% (USD Class I as of 31.8.2015) compared to a figure of -7.7% for the comparative index over the same five year period. It was also awarded a maximum five stars for its performance over five years (as of 31.10.2015) by international fund ratings agency Morningstar, putting it in the top 10% of its peers in terms of performance.

 

PERFORMANCE (USD)


REFORMS AND SUPPORT

A number of other fundamental developments are also strengthening the region’s economic health and, subsequently, investment opportunities. ASEAN governments are moving to support their economies with a range of fiscal and other policy measures including income tax cuts, hikes in minimum wages and spending on infrastructure and rebuilding, all of which are aimed at bolstering investment spending and domestic consumption. More active economic reforms are also being undertaken in a bid to attract more investment, including easier licensing procedures, quicker public tenders and simplified land acquisition procedures for industrial developments. Access to previously restricted sectors such as healthcare, energy and telecoms, has also become easier.

 

The region’s collective potential is being seized upon by the individual countries within it as intra-ASEAN trade and economic integration continues to deepen.

 

  • Economic links between ASEAN members continue to expand quickly and in the last ten years intra-regional trade has grown faster than total ASEAN exports. Businesses now regularly expand their operations beyond their national borders to seek growth and diversification in the region.
  • ASEAN countries have all committed themselves to creating an ASEAN Free Trade Area, an ASEAN-wide manufacturing base, an ASEAN Investment area and the single integrated ASEAN Economic Community (AEC) is expected to allow for easier liberalisation and facilitation of investments into the region, making ASEAN countries more globally competitive.
  • Individual markets have benefitted from the growing correlation between ASEAN markets as the region has increasingly come to be seen as a single investment destination, highlighting opportunities in some individual countries which investors otherwise may have overlooked.

 

GEOGRAPHICAL BREAKDOWN

OUTLOOK

In the medium to long-term, the region remains a very promising area to invest in with local economies expanding healthily and middle class populations growing quickly. In the shorter-term, like most emerging markets, many ASEAN countries are facing headwinds from the slowdown in China and the delay to US interest rate rises. Recent GDP data suggests economic activity in the region may be on the slower side in the near future. While the problems related to China and perceived global risk will not lead to a repeat of the 1997/1998 Asian Crisis as countries are in a far sounder economic position than at that time, investor sentiment in the region may remain bearish in the short run, especially if the USD is strong and commodities are weak.

 

INVESTMENT ADVISER

The Fund’s investment adviser is the award-winning Asian investment specialist CIMB-Principal Asset Management, part of CIMB Group, South East Asia’s fourth largest banking group with total funds under management of almost 17 billion USD. It has an integrated team of more than 50 investment professionals across the region using their local knowledge and presence to ensure clients get the best possible service.

 

 

IMPORTANT NOTE: This report has been prepared for information only, and it does not represent an offer to purchase or subscribe to shares. World Investment Opportunities Funds (“WIOF”) is registered on the official list of collective investment undertakings pursuant to part I of the Luxembourg law of 17 December 2010 on collective investment undertakings as an open-ended investment company. WIOF believes that the information is correct at the date of production while obtained from carefully selected sources considered to be reliable. No warranty or representation is given to this effect and no liability can be assumed for the correctness or accuracy of the given information which may be subject to change at any time, without notice. Past performance provides neither a guarantee, nor an indication of future performance. Value of the shares and return they generate can fall as well as rise. Currency fluctuations, either up or down, may also affect value of the investment. Due to continuing market volatility and exchange rate fluctuations, the performance may be subject to significant changes over a short-term period. Investors should be aware that shares in the financial instruments entail investment risks, including the possible loss of the invested capital. Performance is usually calculated on the basis of the relevant NAV unless stated otherwise. Performance shown does not take account of any fees and costs associated with subscribing or redeeming shares. It is assumed that all dividends were reinvested. WIOF prospectus is available and may be obtained through www.1cornhill.com. Before investing in any WIOF Sub-fund(s) investors should contact their financial adviser/legal adviser/tax adviser and refer to all relevant documents relating to the WIOF and its particular Sub-fund(s), such as the latest annual report and prospectus that specify the particular risks associated with the Sub-fund, together with any specific restrictions applying, and the basis of dealing. In the event investors choose not to seek advice from a financial adviser/legal adviser/tax adviser, they should consider whether the WIOF is a suitable investment for them.