Manulife’s Asean Growth Fund delivers 3.9% net returns

MANILA, Philippines - The ASEAN Growth Fund (AGF) has delivered net return of 3.9 percent since it was introduced in November 2012, while its benchmark MSCI South East Asia Small Cap Index shed 3.6 percent in the same period.

This translates into 7.5- percent outperformance of the benchmark index.

The AGF is a regional investment fund that Manulife Philippines has tapped for three of its variable unit linked (VUL) insurance products.

This positive performance was achieved despite volatile equity market conditions.

In mid-2013 significant liquidity exited the region and equity markets lost ground on concern over the US Federal Reserve’s withdrawal of quantitative easing (QE) and the potential for interest rates to subsequently rise.

Markets took another hit in the first quarter of 2013, when concern over the Chinese economy led investors to trim emerging market exposure.

Manulife Asset Management Asia senior portfolio manager for equities Kenglin Tan said that the AGF’s relative resilience amid tough market conditions is largely due to careful selection of stocks that have attractive company specific growth catalysts and solid management.

“This investment strategy enables us to somewhat limit losses amid market volatility,” Tan added.

The AGF is based on the company’s Southeast Asian Small Cap strategy, an investment approach which seeks to generate long-term capital growth by investing in US dollar-denominated equity and equity-related securities issued by companies incorporated in ASEAN member countries or those with material exposure to ASEAN markets.

The AGF allows local investors to take advantage of attractive investment opportunities across the ASEAN region.

Manulife Asset Management (Asia) manages the Southeast Asian Small Cap strategy and the AGF.

The company, which is the global asset management arm of Manulife Financial, has a network of about 25 equity professionals located on the ground across the ASEAN region.

These investment experts apply local-market knowledge to conduct in-depth analysis of often under-researched stocks and identify those with strong re-rating potential.

Tan said that Manulife Financial had a generally positive economic backdrop for ASEAN equity markets.

The ASEAN 5 (Indonesia, Malaysia, Philippines, Thailand and Vietnam) are expected to post average GDP (gross domestic product) growth of 4.9 percent this year while Singapore’s economy is forecast to expand 3.6 percent.

These growth rates far exceed the 1.6-percent GDP rise expected in the European Union and the 2.8-percent growth outlook in the US.

Manulife sees the potential to generate decent returns in every ASEAN market based on careful research to select the right investment opportunities.

The global financial player is particularly positive on Indonesia, Malaysia, the Philippines and Vietnam at the moment.

“That being said, we will continue to look for good investment opportunities across the region and will strictly adhere to our sell discipline and take profits if valuations become too rich,” Tan added.