[Awards Q&A] Best Asia-Pacific Equity Fund - JPMorgan Pacific Securities Fund

To help our readers better observe what makes a successful fund house, we sent out questionnaires to the winning teams earlier and asked them to shed lights on their team structure, how various risks have affected their investment decisions, and the major portfolio changes over last year, etc.

Morningstar Editors 20 March, 2020 | 7:19
Facebook Twitter LinkedIn

Winner of Best Asia-Pacific Equity Fund - JPMorgan Pacific Securities Fund

Key Stats
Inception Date: 1978-05-26
Morningstar Rating (2020-02-29): ★★★★

Manager: Aisa Ogoshi, Robert J. Lloyd  

Q1) Can you highlight any major changes you made to the portfolio over the course of 2019? Were there any particular holding(s) or theme(s) that drove the fund’s performance for the year?

Our investments are focused on long term structural growth opportunities and our conviction ideas have been well reflected in our positioning.  In that regard, we have held overweight positions in healthcare, games, and financial services which were the main drivers of outperformance for 2019.  The rebound in the technology sector was also a tailwind.

Q2) What are some specific opportunities you have identified for 2020, and do you expect your 2019 outperformers to persist in 2020? What are the top risk factors that could impact your portfolio, and how are you positioned to mitigate these potential risks?

We have witnessed how digitalisation and technology upgrade has benefitted the game industry winners, we will continue to seek opportunities of this kind where the shift in business model and competitive management can extend the duration and quality of growth.  A spike in inflation and/or interest rates would represent a primary risk but we manage these by monitoring our factor exposures via a proprietary data base.

Q3) In which areas do you think risk is over/understated with respect to (i) the outcome of the US Presidential election, (ii) persistently loose monetary policies by major economies, (iii) Coronavirus impact on global growth, and how are you expressing these views in your portfolio?

We are maintaining our high exposure to quality in portfolios.  Our strategy is purely based on bottom up inputs and while keeping macro developments in mind, our focus will always be on fundamentals of the businesses we invest in.   It is difficult to predict politics but we can prepare for volatility, and with COVID-19 impacting both supply and demand globally, the low rate, slowing growth enviroment is likely to be extended.  Our experience in investing in Japan suggests that quality companies tend to come out of these scenarios in a stronger position.

Q4) How is your investment team organized? Have there been any changes to the investment team or structure over the past year? Do you anticipate adding to the team in the near future?

The Emerging Markets Asia Pacific (EMAP) Equities team is responsible for managing all global, regional and single country Emerging Markets and Asia Pacific equity portfolios, with investment professionals located in eight locations across the globe. The portfolio managers are supported by the country specialists and by the research analysts within the wider EMAP team.

There were no changes to the investment team responsible for managing the fund.

Our focus is on adding value for our clients and client portfolios over long-term. We will continue to add to resources as and when we feel appropriate and necessary to achieve this key objective.

Q5) Where do you feel that the investment team or the investment process can be improved upon in the future?

We have a bottom-up based stock selection process with a focus on investing in core franchises that can deliver consistent compounded growth over the long term and quality growth companies with  high rates of growth in their respective industries. We have strong global research resources that help us with our investment decisions. Through active discussions with country specialists and sector analysts combined with our own research, we form a concentrated portfolio of high conviction ideas . We will continue to improve on data management as well as knowledge sharing methods to further strengthen our alpha generation capabilities.

Facebook Twitter LinkedIn

About Author

Morningstar Editors  -

© Copyright 2022 Morningstar Asia Ltd. All rights reserved.

Terms of Use        Privacy Policy