Martin Currie Pacific Trust, the last of the pan Asia including Japan funds, is planning to drop Japan from its remit and move to an Asia ex Japan and Australasian strategy. It wants the new portfolio to be completely unconstrained from any benchmark and so is proposing to measure its future performance against the GDP growth of the Asia ex Japan region over rolling three year periods. The portfolio would become more concentrated than it is today – between twenty and thirty stocks and stocks would be selected on the basis of their potential to make absolute gains.
The choice of the new benchmark is explained by pointing to the gap in GDP growth and stock market performance in the region. Over the past 20 years GDP growth has outstripped stock market growth by 6.7% per annum (GDP growth has been 10.4% per annum and the MSCI Asia ex Japan index has grown by 3.7%).
The investment manager already runs a $1.5bn fund in this style for institutional clients (Martin Currie Asia Long-Term Unconstrained Fund). This has outperformed Martin Currie Pacific Trust by 5.4% per annum since 31 October 2008.
The investment manager is planning to pay part of the cost associated with implementing the new strategy.
At the same time the Board, led by Patrick Gifford (pictured) is planning a tender offer for up to 10% of the issued share capital of Martin Currie Pacific Trust. This will be conducted at a price close to asset value.