Over the six months that ended on 31 January 2015, Fidelity Asian Values outperformed its benchmark, generating a return on net assets of 9.2% as compared to 8.2% for the MSCI AC Far East ex Japan Index. Shareholders did even better than this though as the discount narrowed from 12.5% to 11.3%, giving them a total return of 10.8%.
John Lo (manager of the fund for the past 13 years) is stepping down as Portfolio Manager of the Company and will be succeeded by Nitin Bajaj. From 1 April 2015 Nitin and John will work closely together as they realign the portfolio over the forthcoming months. John will focus exclusively on his institutional segregated mandates in future.
Nitin Bajaj is currently the portfolio manager for the Fidelity Funds – Asian Smaller Companies Fund. He started at Fidelity in 2003 in the London office as a Research Analyst. In 2007, after a very successful and highly rated period in research, Nitin became an Assistant Portfolio Manager for the Fidelity Global Special Situations Fund in the UK. In 2009, he moved to Fidelity’s Mumbai office, to manage FIL’s domestic Indian equity funds. In 2013 he moved to Singapore and started managing the Asian Smaller Companies Fund on 1 September 2013. Nitin holds a Bachelor of Commerce degree from the University of Delhi, an MBA from Insead, Singapore and is a member of the Institute of Chartered Accountants of India.
Nitin is a value investor and aims to generate alpha through stock selection within the Asia Pacific ex Japan region in a manner which the Board believes closely delivers the investment objective for its shareholders. He prefers investing in smaller companies because they tend to be less well researched, which leads to greater valuation anomalies. Asset allocation at the country and sector level is primarily a result of his bottom-up approach, this is similar to John’s style and the Board believes therefore that there is a continuity of approach and shareholders do not need to vote on a change of investment objective. Nitin’s fundamental analysis involves the evaluation of various factors including, but not limited to, stock valuation, financial strength, cash flows, company’s
competitive advantages, business prospects and earnings potential. He has a two
to three year investment horizon.
The Board is also planning to change the benchmark. The MSCI AC Far East ex Japan Index excludes India and Australia. The Company is the only closed ended fund in its peer group to adopt this benchmark as its reference index. With these factors in mind the Board has decided that the MSCI Asia Pacific Ex Japan index (which includes both India and Australia and is widely used within the peer group) is more appropriate for performance comparison purposes and will be adopted from 1 August 2015.
The manager’s statement says that the overweight stance in China-based insurance provider Ping An Insurance was the single largest contributor to outperformance over the period.
FAS : Change of manager and benchmark for Fidelity Asian Values