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Strong showing for Asian funds in Year of the Ox

swon@globeandmail.com

WHAT ARE WE LOOKING FOR?

How Asian stock funds fared in the Chinese Year of the Ox.

It's time to see how the past year turned out as we embark tomorrow on the New Year of the Tiger. If it is any consolation, the tiger is symbolic of energy and power. It may be a positive sign for the Chinese market this year.

TODAY'S SEARCH

We asked Globe Investor fund analyst Victor Tan to screen the Greater China, Asia Pacific and Asia Pacific ex-Japan equity funds, and rank them by performance for the year ended Jan. 31. The time period is close enough, given that the Year of the Ox began on Jan. 26. We excluded U.S.-dollar and duplicate versions of the funds, and those without a one-year record.

WHAT DID WE FIND?

The Year of the Ox turned out to be a very bullish.

Asian stock funds were rebounding after a dismal 2008. But investors didn't have to be in Greater China equity funds to get the big returns. Both Renaissance China Plus, which focuses on China, and Dynamic Far East Value, a regional fund, rose to the top of the heap with a 72-per-cent gain.

Unlike most Asian funds that will invest in China through firms listed in Hong Kong, Renaissance China Plus can invest in securities listed on the Chinese stock exchanges. That may have helped performance.

Chuk Wong, manager of Dynamic Far East Value, said China was the largest country weighting through Hong Kong-listed stocks that represented about 25 per cent of his fund.

Indonesia was about 10 per cent; India, 8 per cent, and Japan, 6 per cent. "Everything I owned last year was on fire," said the contrarian value manager with Goodman & Co. Investment Counsel Ltd.

Winners over the past year included Chinese stocks like sportswear maker Anta Sports; traditional Chinese medicine manufacturer China Shineway Pharmaceutical and South Korean auto parts supplier Hyundai Mobis.

Over a year ago, the Chinese market became very attractive because stocks were "very, very cheap," especially against a backdrop of China's huge stimulus program to boost economic growth, Mr. Wong said.

But "I think the easy money has been made," and picking the right stocks will be key over the next 12 months as Chinese policy makers embark on a tightening economic policy, he said. "Typically, when you are in a tightening cycle, interest rates will likely go up and the overall stock market might be in a trading range or might have a correction."

Outside of China, Mr. Wong is upbeat on Indonesia, the world's largest Islamic democracy with 230 million people. While the country was "a basket case 10 years ago," it has been making major headway in cutting government and corporate debt, he said.

******

How Asian stock funds fared in the Year of the Ox
(As of Dec. 31)Latest(Jan. 31)Calendar year % returns
Fund nameCategory Assets ($-mil)MER1-yr % rtn20092008200720062005
Renaissance China PlusGreater China Equity197.913.1972.171.3-37.028.651.8-3.2
Dynamic Far East ValueAsia Pacific Equity125.932.6171.965.0-44.05.721.519.9
Mavrix Asia PacificAsia Pacific Equity1.803.4764.568.2-45.2
BMO Greater China ClassGreater China Equity128.302.7351.545.8-47.538.247.4-0.3
Renaissance AsianAsia Pacific Equity8.473.2148.242.1-43.315.07.821.0
AGF Asian Growth ClassAsia Pacific ex-Japan Equity56.293.0446.543.0-39.518.131.76.2
Investors Pacific International-CAsia Pacific ex-Japan Equity275.102.8745.638.1-42.818.932.511.8
Fidelity China AGreater China Equity55.862.6845.144.4-37.639.3
Excel ChinaGreater China Equity110.253.3244.943.4-45.929.783.2-4.8
HSBC AsiaPacific-IAsia Pacific ex-Japan Equity51.122.4444.742.3-39.713.529.917.1
Fidelity Far East-AAsia Pacific ex-Japan Equity67.582.5644.340.7-34.015.739.422.0
Mackenzie Focus Far East Class AAsia Pacific ex-Japan Equity104.582.5141.938.6-35.517.526.46.9
HSBC Chinese Equity-IGreater China Equity259.882.5938.236.9-43.435.080.37.2
Perpetual Indo-PacificAsia Pacific Equity49.902.8436.329.3-26.1-2.917.917.9
Manulife China Opportunities ClassGreater China Equity81.852.9733.232.7-39.324.272.98.8
BMO GDN Asian Grth & Inc-MAsia Pacific Equity293.482.7531.327.0-24.56.020.311.0
Investors Pan Asian Growth-CAsia Pacific Equity31.862.8629.817.5-32.5-4.712.215.2
Pro FTSE RAFI Hng Kng China Idx-AGreater China Equity29.231.9-37.6
AGF China Focus ClassGreater China Equity303.232.9928.927.7-41.730.567.68.6
Investors Greater China CGreater China Equity171.212.8627.923.4-39.029.5
Scotia Pacific RimAsia Pacific Equity25.042.8326.817.4-35.65.011.126.4
CIBC Asia PacificAsia Pacific Equity116.392.8826.718.8-26.33.24.320.2
TD Asian GrowthAsia Pacific ex-Japan Equity136.052.7325.521.1-39.020.439.816.9
FÉRIQUE AsianAsia Pacific Equity56.141.2523.620.1-30.7-2.314.718.3
Quebec Professionals Asian EquityAsia Pacific Equity1.3823.213.9-27.3-10.911.811.8
CIBC Asia Pacific IndexAsia Pacific Equity17.011.1820.710.3-22.9-4.914.318.1
RBC Asian EquityAsia Pacific Equity698.672.1518.912.0-32.9-2.69.525.3
TD Pacific Rim-IAsia Pacific Equity34.212.4717.17.7-32.33.314.015.5
Altamira Asia PacificAsia Pacific Equity44.432.4015.69.8-20.6-7.113.714.1
Fidelity AsiaStar AAsia Pacific ex-Japan Equity76.962.6914.015.3-18.56.3
CI PacificAsia Pacific Equity75.732.339.00.4-24.24.216.920.7
Hang Seng Total Return Index30.029.0-34.917.833.32.2
MSCI Far East ($ Cdn)4.0-4.2-15.3-14.98.521.1
Source: Globe Investor

© 2007 The Globe and Mail. All rights reserved.

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