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Guy Barnard Janus Henderson
Tim Gibson Janus Henderson
BlackRock
Janus Henderson
Global Equity
Anthony Srom Fidelity International
Dhananjay Phadnis Fidelity International
Martin Lau First State Investments
Mark Davids J.P. Morgan Asset Management
Joanna Kwok J.P. Morgan Asset Management
Barings
Fidelity International
J.P. Morgan Asset Management
Pictet
HSBC Global Asset Management
Matthews Asia
Matt Colvin BlackRock
Howard Wang J.P. Morgan Asset Management
Greg Kuhnert Ninety One
Jack Lee Schroders
Ninety One
Schroders
UBS Asset Management
Ben Ritchie Aberdeen Standard Investments
Michael Constantis BlackRock
Fabio Riccelli Fidelity International
Roger Morley MFS
AB
Goldman Sachs Asset Management
MFS
Dev Chakrabarti & Mark Phelps AB
David Dudding Colombia Threadneedle Investments
Katherine Davidson & Charles Somers Schroders
Columbia Threadneedle Investments
Merian Global Investors
Morgan Stanley Investment Management
T. Rowe Price
Alex Duffy Fidelity International
Leon Eidelman & Austin Forey J.P. Morgan Asset Management
Sonal Tanna & Richard Titherington J.P. Morgan Asset Management
Newton Investment Management
James Govan Barings
BNP Paribas Asset Management
DWS
Richard Jones & Martin Lau First State Investments
Kai Kong Chay Manulife
First State Investments
Manulife
Invesco
Mirae Asset
PineBridge Investments
Nicholas Price Fidelity International
Sophia Li & Martin Lau First State Investments
James Cross, Jonathan Curtis & JP Scandalios Franklin Templeton Investments
Denny Fish Janus Henderson
Franklin Templeton Investments
Daniel Roarty AB
James Tierney AB
Giri Devulapally J.P. Morgan Asset Management
Joseph M. Eberhardy & Thomas Ognar Wells Fargo
Michael T. Smith & Christopher J. Warner Wells Fargo
St James’s Place
Jonathan Coleman & Scott Stutzman Janus Henderson
Judith Vale Neuberger Berman
Asia Pacific excl. Japan Asia Pac Small & Med Cies China Emerging Markets Asia Europe Global Global Emerging Markets Global Equity Income Global Themes Hong Kong India Japan Technology US US Small & Mid Cap
Asia Pacific excl. Japan Asia Pac Small & Med Cies China Emerging Markets Asia Europe Global Global Emerging Markets Global Equity Income Global Themes India Japan Singapore Technology US US Small & Med Cies
Asia Pacific excl. Japan Asia Pac Small & Med Cies China Emerging Markets Asia Europe Global Global Emerging Markets Global Equity Income Global Themes Hong Kong Japan Singapore Technology US US Small & Med Cies
Asia Pacific excl. Japan Asia Pac Small & Med Cies China Emerging Markets Asia Europe Global Global Emerging Markets Global Equity Income Global Themes India India Singapore Technology US US Small & Med Cies
Asia Pacific excl. Japan Asia Pac Small & Med Cies China Emerging Markets Asia Europe Global Global Emerging Markets Global Equity Income Global Themes India Japan Japan Technology US US Small & Med Cies
Asia Pacific excl. Japan Asia Pac Small & Med Cies China Emerging Markets Asia Europe Global Global Emerging Markets Global Equity Income Global Themes India Japan Singapore Technology US US Small & Mid Cap
James Veneau AXA Investment Managers
Allianz Global Investors
AXA Investment Managers
Brad Gibson & Jenny Zeng AB
Peter Eerdmans & Wilfred Wee Ninety One
E Fund Management
Income Partners Asset Management
Neuberger Berman
Laurent Crosnier Amundi
Rick Patel Fidelity International
Jamie Grant First State Investments
Andrew Norelli J.P. Morgan Asset Management
Jim Caron, Richard Ford, Michael Kushma & Christian Roth Morgan Stanley Investment Management
Capital Group
Legg Mason
PIMCO
Peter Khan Fidelity International
Tim Foster Fidelity International
Robert Vanden Assem & John Yovanovic PineBridge Investments
Patrick Vogel Schroders
Jupiter Asset Management
Craig Abouchar & Sean Feeley Barings
Gershon Distenfeld, Paul DeNoon & Douglas Peebles AB
Matthew Sheridan AB
Mark Kiesel, Scott A. Mather & Mihir Worah PIMCO
Asia Pacific Hard Currency Asia Pacific Local Currency Chinese Yuan EM Global Hard Currency Global Global Flexible Global High Yield US Dollar
Bonds Equity Property
Ricardo Adrogué & Cem Karacadag Barings
Emil Babayev & Pierre-Yves Bareau J.P. Morgan Asset Management
Scott McKee J.P. Morgan Asset Management
Chris Sawyer Barings
Sander Bus Robeco
Michael Della Vedova & Mark J. Vaselkiv T. Rowe Price
Robeco
Joanna Kwok & Mark Davids J.P. Morgan Asset Management
Lydia So Matthews Asia
Elizabeth Soon PineBridge Investments
Bin Shi UBS Asset Management
Paul H. Blankenhagen & Juliet Cohn Principal Global Investors
Stephan Werner DWS
Yves Kramer Pictet
Luciano Diana & Gabriel Micheli Pictet
Toby Hudson Schroders
Fumichika Tanemoto Invesco
Shoichi Mizusawa, Miyako Urabe & Nicholas Weindling J.P. Morgan Asset Management
Dan Carter Jupiter Asset Management
Hugo Machin & Tom Walker Schroders
Asia Pacific Hard Currency
manager nominee shortlist
18.9
bn
years
months
winner
biography
group nominee shortlist
assets under management (usd)
sector size (usd)
manager experience in the sector
funds available in hong kong
3-YEAR MANAGED PERFORMANCE (USD)
Asia Pacific Local Currency
Brad Gibson is the co-head of the Asia-Pacific fixed income team at AllianceBernstein. He was previously head of rates strategies at ING Investment Management Australia, where he was responsible for the management of a range of domestic, international, diversified, nominal and inflation-linked bond portfolios. Gibson was previously a member of both the interest-rate options and bond committees of the Australian Financial Markets Association and has lectured on fixed income portfolio management for the Securities Institute of Australia.
9.1
winners
biographies
Jenny Zeng is a portfolio manager for the Asian Credit portfolios and head of credit research in Asia at AllianceBernstein. She specialises in Greater China and India corporate credits. Prior to joining the firm in 2013, Zeng was at Citigroup for seven years, most recently serving as a vice-president and credit-sector specialist, covering Asian corporate credit. She was ranked as one of the top three research analysts for overall credit research in the Asiamoney Fixed Income Poll during her years with Citigroup. Zeng holds a master’s in economics from the University of International Business and Economics (China). She is a CFA charterholder.
Chinese Yuan
Peter Eerdmans graduated from the Erasmus University in Rotterdam where he studied econometrics. He started his career in 1995 at Robeco and became a senior portfolio manager in global bond management before he left. In 2001, Eerdmans joined Watson Wyatt where he worked in bond currency manager research and in 2005 he joined Investec Asset Management, now renamed Ninety One, where he is currently the head of emerging markets debt.
727
m
Wilfred Wee is a portfolio manager at Ninety One, formerly known as Investec Asset Management, where he deals in Chinese and Asian bonds, using a fundamental investment style. Prior to this, he was vice-president at GIC. Wee graduated from Stanford University and the University of Cambridge with a degree in economics, and is a CFA charterholder.
Emerging Markets Global Hard Currency
36
Global
61.5
Global Flexible
80.8
Global High Yield
44.4
month
US Dollar
35.5
43.3
Asia Pacific Excluding Japan
4.5
Asia Pacific Small & Medium Companies
31.2
China
48.1
Emerging Markets Asia
46.2
Europe
David Dudding Columbia Threadneedle Investments
83.9
51.1
Global Emerging Markets
13.1
Global Equity Income
21.4
Global Themes
6.7
Hong Kong
7.5
India
In association with
Navigating uncertainty In our 14 years of investing in India, PineBridge Investments has consistently focused our stock selection on strong fundamentals, management capability, and valuations. This emphasis on long-term business sustainability translates into an unconstrained, high-active share portfolio in a market dominated by a few large caps. In today’s uncertain market, we believe such a portfolio has the advantage of having flexibility to navigate opportunities and risks across market capitalization ranges and sectors to position the portfolio for the eventual recovery and beyond. Our investment process focuses on fundamental bottom-up stock picking. In an emerging market like India where risks are galore, a deep understanding of the businesses that one is investing is key. The strength of the business model, the quality of the people running the business, the valuation are the three most important criteria we look for. In other words, we look for businesses that are inherently strong to withstand a storm. We make sure there is capable and trustworthy management in place, and that the price we pay is justifiable. If one goes with broad macro-economic trends, one may end up investing in flawed business models (even in a growth sector) or in historically successful business models (example, index stocks) that may/may not have the same advantages going forward. While the macro picture may look daunting in the near term, we believe this time-tested, company-by-company stock selection approach enabled by our robust on-the-ground presence in India will offer more resiliency to a portfolio and capture mispricing opportunities – delivering meaningful alpha to patient investors.
An Unconstrained Approach to Managing Risk in India
DISCLAIMER All investments involve risks, including the loss of principal amount invested. Past performance is not indicative of future results. Any views expressed represent the opinion of the manager and are subject to change. This document does not constitute any investment advice or an offer to sell or buy or a recommendation for securities. We are not soliciting or recommending any action based on this material. In Hong Kong, this document is issued by PineBridge Investments Asia Limited, a company incorporated in Bermuda with limited liability. This document has not been reviewed by the Securities and Futures Commission (SFC). Investors should note that the website www.pinebridge.com and any other website referred to in this document have not been reviewed by the SFC and may contain information of funds not authorized by the SFC. In Singapore, this document is issued by PineBridge Investments Singapore Limited (Company Reg. No. 199602054E), licensed and regulated by the Monetary Authority of Singapore (MAS). This advertisement or publication has not been reviewed by the MAS. Investors should note that the website www.pinebridge.com and any other website (including any contents therein) referred to in this document have not been reviewed or endorsed by the MAS.
The Indian equity markets have not been immune from the coronavirus pandemic. The anticipated drop in demand from the lockdown imposed in March is likely to affect Indian corporate earnings in the short term with significant implications on investors.
14.1
Japan
24.6
Technology
46
St James's Place
US
US Small & Mid Cap
3.2
The fallout from the coronavirus will likely continue to weigh on consumer sentiment in the weeks and months ahead. High yield felt the effects of this in March as bond spreads widened significantly. While spreads subsequently tightened following the U.S. Federal Reserve’s announcement that it would begin to buy so-called fallen angel credits — or those recently downgraded from the lowest investment grade status to high yield — the length and severity of the pandemic is a still a big unknown. With that in mind, we continue to closely monitor and reevaluate their views on an ongoing basis and as conditions dictate. Looking at the markets today, many issuers appear to be well-positioned for a recovery following the pandemic itself, once supply lines open back up and companies return to more normal trading. We also believe investors will act rationally to bridge the extreme nature of the event, providing liquidity support where necessary to help companies through the disruption. In addition, many of the companies in this space have positioned their maturity walls well following the high levels of recent refinancing activity. This, together with the low base rate environment, should help mitigate the impact of subsequent economic weakness. Some Industries More Vulnerable Than Others The effects of COVID-19 will not be uniform, with some industries and companies more vulnerable than others. For instance, there are a number of higher-quality companies that have traded down significantly despite being largely sound from a fundamental perspective and unlikely to experience a massive disruption to earnings. Food manufacturers, cable providers and packaging companies, for example, seem to be operating more or less as usual — and in some cases may even be benefitting from stronger sales during this period. We believe these businesses are also likely to experience the quickest recoveries once this event is behind us. There are also many companies that are facing short-term challenges but remain well positioned longer-term. While these businesses may require liquidity to move through this short-term pain, they were on solid footing coming into this event and will likely emerge in decent shape afterward. Cinema businesses, travel companies and sports franchises are examples. It’s not surprising that industries incurring a direct blow from the pandemic have been hardest-hit. Energy, which has been under pressure for the last several years, is a prime example. Retail is another, a sector comprising, many highly levered businesses that were already facing secular challenges. This doesn’t mean there isn’t value to be found in these sectors on a selective basis — but in many cases, these industries and companies will be hit harder, and take longer to recover.
How High Can Defaults Go? It’s impossible to say with any accuracy how high defaults may ultimately go. Broadly speaking, we believe there are two categories of defaults likely to occur. The first is composed of good businesses that may only go into default as a result of this specific event. While these companies may switch off coupons and/or request liquidity support — either from debt or equity investors — we believe that the support will be forthcoming. As a result, we think there is a good chance those businesses will ultimately bounce back in the aftermath of the epidemic. The second category comprises companies that were perceived to be high risk prior to the pandemic — such as those that were trading at stressed or distressed levels at the end of last year. These companies may have already been headed for balance sheet restructurings — though this event will likely accelerate those restructurings. Here, while challenges will certainly be amplified in the short-term, we believe there is a strong possibility that value will bounce back over time. Lessons From History While this crisis should not be taken lightly, it is worth reiterating that financial markets have a history of overreacting to headlines and a tendency to exhibit short-term pricing inefficiency during periods of dislocation or volatility. In the years since the financial crisis, there have been a number of risk-on/risk-off periods, with dips in the market often being followed by periods of recovery and gains. For example, high yield spreads saw extreme widening during the 2008 financial crisis, and significant drawdowns across the board. Within a year, the markets had largely recovered, and all went on to deliver 12-month total returns in excess of 40%. The bond markets declined again during the European sovereign debt crisis in 2011, with spreads widening materially — but went on to rally the following year. During the energy and commodity shock in 2015, high yield took a negative turn as oil prices fell. Less than six months later, the market rallied. In the fourth quarter of 2018, headline-induced turbulence caused bond spreads to widen — in excess of what was experienced during the post-GFC period. Within two months, the markets experienced a swift rebound, and delivered very strong performance on the year. While every crisis is different, we have been in similar situations before — and we know that ultimately, times of crisis can also yield significant opportunity if navigated carefully. Not the Time to Time the Markets History has shown that it is almost impossible for investors to “time the markets” in high yield. Rather, what has been more effective over the long run is a flexible approach, whereby managers shift allocations across geographies as prices decouple from fundamentals and relative value emerges. Ultimately, we don’t know if we are nearing the worst of the coronavirus crisis or if we have many months to go. That said, in higher-rated parts of the high yield bond universe, the long-term risk-reward picture has become particularly compelling — but investors must stay vigilant.
High Yield: Finding Value in Turbulent Times
IMPORTANT INFORMATION This document is intended for institutional investors/professional investors only. The document is for informational purposes only and is not an offer or solicitation for the purchase or sale of any financial instrument or service. The material herein was prepared without any consideration of the investment objectives, financial situation or particular needs of anyone who may receive it. This document is not, and must not be treated as, investment advice, investment recommendations, or investment research. In making an investment decision, prospective investors must rely on their own examination of the merits and risks involved and before making any investment decision, it is recommended that prospective investors seek independent investment, legal, tax, accounting or other professional advice as appropriate. Unless otherwise mentioned, the views contained in this document are those of Barings. These views are made in good faith in relation to the facts known at the time of preparation and are subject to change without notice. Parts of this document may be based on information received from sources we believe to be reliable. Although every effort is taken to ensure that the information contained in this document is accurate, Barings makes no representation or warranty, express or implied, regarding the accuracy, completeness or adequacy of the information. Investment involves risks. Past performance is not a guide to future performance. Investors should not only base on this document alone to make investment decision.
Times of crisis can yield significant opportunity if navigated carefully.
"In higher-rated parts of the high yield bond universe, the long-term risk-reward picture has become particularly compelling — but investors must stay vigilant."
Martin Horne
Head of Public Fixed Income, Global High Yield Investments Group, Barings
Sources: Bank of America Merrill Lynch & Credit Suisse.
Emerging market sovereigns come in all shapes and sizes. The market may have sold off for now, but each sovereign must be taken on its own merits when recovery comes, says Barings. ‘Emerging market sovereigns have had a tough ride since the end of February. But all markets are under pressure; there are no winners and losers. It is hard to generalise,’ Barings says. There are multiple factors to consider, but it is important to remember why investment grade sovereigns have the ratings they have, adds Barings. They have the financial strength and policy flexibility to cope with a big, but temporary, crisis. Quite how long the social and economic lockdown lasts is not yet known, but it may likely be a 2020 rather than multi-year event; investment grade countries will come out the other side when sovereign debt markets begin their recovery. ‘The vast majority of investment grade countries have the capability to withstand adversity. Current spreads — especially for investment grade, but for many high yield countries too — overstate the actual probability of default,’ explains Barings. Multi level The Barings Emerging Market Sovereign Debt team is evaluating each issuer at a number of levels. First is the financial strength each had before the crisis hit, including its fiscal position and the depth of its domestic financial markets. Next comes its ability to call on help from other countries through bilateral and multilateral agreements. The third element is the profile of each country, as the shock to growth will affect each economy differently. Those reliant on tourism and remittances from overseas workers will need closer analysis of the full impact on their balance of payments. Likewise, lower oil prices are generally good for developed and emerging market economies. But again, they also reflect the huge drop in energy demand, which may outweigh the benefits. That leads to the fourth element — the countries’ exchange rate flexibility and ability to adjust. Emerging market oil exporters will be hardest hit; some have sufficient tools to weather the crisis, others are more fragile, illustrates Barings. Those with sufficient currency reserves and exchange rate policy flexibility will be better placed to adjust as oil exports fall. Finally comes the willingness of each country to pay its debts — specifically, whether its actions reflect both the capacity and desire to pay coupons or capital on maturity.
One size does not fit all for emerging market sovereigns
Strong ESG principles help uncover which countries can sustain growth and improve their creditworthiness.
"Key for us is sustainability"
Stronger than before Many emerging market countries have made good progress in bolstering their finances in recent years, narrowing their current account deficits and ensuring institutions have sufficient firepower. ‘Local currency issuers are investment grade or close to it, like Brazil, Mexico, Columbia, Peru, China and others,’ says Barings. ‘Default risk is low.’ Providing such countries can weaken their currencies to match changes in their balance of payments, they should be able to continue to service and issue debt at low rates, even as their economies slow. Hard currency is more diversified, with more names and more high yield issuers. There are fewer generalisations that can be relied on. Analysis is more labour intensive, especially for the weaker credits, Barings thinks. The ESG effect The Barings Emerging Market Sovereign Debt strategy is designed to withstand shocks. There have been no major changes to its composition, although the team has cut some exposure to issuers most at risk from the tourism shock. But market technicals are also in play; outflows across the local and hard currency classes have risen as ETFs have sold. Spreads are wider and market liquidity has dipped. Active managers, including Barings, want to avoid forced selling where possible. ‘The market is not efficient, with everyone working from home making it harder to execute trades. There is great value but everything depends on country selection. There is not value in everything,’ says Barings. Here, the strong commitment to environmental, social and governance (ESG) principles is a major plus for the emerging market sovereign team. Having a strong view of a country’s institutions, its checks and balances, predictability and visibility, and transparency of political power are the basic ingredients for the financial outcomes each country achieves. ‘Key for us is sustainability. We are interested in a country’s fabric and we want its financial outcomes to be both satisfactory and sustainable,’ highlights Barings. Yet, as always when it comes to emerging markets, one size does not fit all. It is unfair and unwise to apply stringent ESG standards to countries further down the path of development. Rather than a relative comparison, each country must be judged on where it starts from and its direction of travel. Barings points out that a country’s income levels, as measured by GDP per capita (and its ability to service debts), are highly correlated with its development outcomes. The wealthier a country is, the more likely it is to have better schools, more hospitals and infrastructure, and a better-functioning judiciary system. Other studies have shown that improving sovereign creditworthiness drives EM sovereign debt returns. Rapid and sustained improvements in income drive those improvements in creditworthiness in the medium and long term. Over time, points out Barings, the sustainability of growth is more important than bursts of rapid growth intercepted with volatility. ‘Barings incorporates ESG analysis from the outset when assessing every opportunity. Our experience gives us the insight into each country to uncover every opportunity and to avoid risk, even if that means taking a contrarian view,’ concludes Barings.
Dr. Ricardo Adrogué & Cem Karacadag
Emerging Market Sovereign Debt Strategy, Barings
The uncertainty over the coronavirus pandemic’s impact on Asian companies has only underscored our long-held investment focus on exceptional fundamentals. As demand loss from lockdowns and disruptions threaten some Asian companies’ earnings, disciplined stock selection becomes a portfolio’s first line of downside defense. Companies with robust business models (for example, companies with dominant industry positions or are indispensable in global supply chains and thus enjoy more resilient demand than others), strong management, and reasonable valuations should be in a better position to ride out contractions. At PineBridge, we have consistently applied a fundamental, bottom-up approach in stock selection in Asian equities. We manage concentrated portfolios with high active share. We know our companies from the inside out and it is this knowledge that gives us confidence in our investments’ outcome over the long run. While uncertainty will likely prevail in the short term, Asian equity valuations may become attractive opportunity again on both an absolute and a relative basis, providing a compelling entry point for long-term investors. In the often-overlooked Small Cap segment, we expect select opportunities as volatility gives rise to mispricing, and local presence will be key to uncovering them. Over the long term, we expect our Small Cap portfolio companies will benefit from secular trends in Asia that will drive growth after the coronavirus outbreak is over - urbanization, automation, environmental and energy, technological innovation, and others. To capture resilient opportunities, disciplined stock selection approach is important at this time. We believe a consistent, time-tested investment process focused on strong fundamentals and a long-term investment horizon, will offer downside protection and gear up a portfolio for the coming recovery.
Weathering the Storm in Asian Small Caps with Strong Fundamentals
Awards methodology
I. CITYWIRE BEST FUND MANAGER AWARDS
Best Fund Manager Awards go to the individual fund manager generating the highest risk-adjusted returns in a particular sector over the past three years to 31 December 2019 in Hong Kong or Singapore (respectively). These are based on the individual track records for all funds they have run in the sector over this period. Our ratings methodologies are actuarially approved by AKG Actuaries & Consultants.
II. CITYWIRE BEST GROUP AWARDS
To win an award, groups must go through the Citywire Group Ratings methodology, which puts them against the best talent in an investment sector. The winner is the top fund group available to investors in Hong Kong or Singapore. How does it work? Citywire Group Ratings recognise the expertise of the group as a whole in managing money in specific investment sectors over seven years. This rewards the depth of talent that sits at the core of the best asset management houses. For these awards, the time period used is Dec 2012 – Dec 2019. We filter to include only the group’s strategies that are registered for sale in Hong Kong or Singapore. This provides the best platform to reward the best groups in Hong Kong or Singapore. Our unique, quant-based methodology ensures fair and transparent scrutiny of the capabilities of each fund group, and allows for comparison between boutiques and global giants. The key components of the methodology are:
MANAGER EXPERIENCE
Every fund manager that has managed money for three years or more counts towards the Citywire Fund Group Rating in every sector they are eligible for.
The analysis period covers seven years. Within this time frame, the average of the manager’s rolling three years risk-adjusted performance in the sector is calculated. This is weighted based on the period of activity during the time frame. The more we know about the managers the better, meaning consistency of outperformance and experience are rewarded.
THE LONGER THE BETTER
Managers must add value above their benchmark over this time period. How much they outperform gives them a manager score.
Outperformance
Managers are attributed a small bonus for managing considerable assets in a sector.
HANDLING MONEY
All managers in the fund group active in that sector, who fulfil the criteria, have their scores averaged to produce a group score.
SCORING THE GROUP