GLOBAL - The newly launched Old Mutual Asia Pacific equity fund has reported a positive return in the first quarter of 2004, with its investment value growing to US$47m (e26.6m).
According to a statement released by Old Mutual Asset Managers (OMAM), the fund, launched in May, returned 0.6%for the three months to July 31 2004, significantly outperforming the Bank of Bermuda Asia including Japan (US$) Index, which was down 4.3% for the same period.
The firm said the positive absolute and relative performance was equally divided between the Asia and Japan markets with performance in Asia benefiting from long positions in cyclical stocks, “reflecting the belief that concerns over slowing global growth had been overdone”.
Fund manager and Asia specialist, Simon Weston commented: “The outlook for Asia is heavily dependent on the global economic outlook, particularly in the US and China. Consensus expectations are for continued reasonable growth in both of these economies, which will be very supportive for Asian economies and markets, given the importance of the external sector.”
Real estate-related stocks performed well for the Japanese market and performance was boosted by holdings that had benefited from excessive near-term interest in a hot Japanese summer, including air conditioning manufacturers and brewers, OMAM said.
Les Jones, fund manager and Japanese specialist, said the future of the Japanese market was dependent on inflows from foreign investors and individual domestic investors.
“Economic prospects remain good, driven by improving domestic consumption, exports to China and the US and reform of Japanese corporate governance,” he said.
“We think that the recent poor second quarter GDP numbers will prove an aberration and we believe this will encourage foreign investors to continue to invest and support the market. Meanwhile, domestic investors have reduced their bought-on-margin holdings and now appear ready to begin a new cycle of buying.”
The fund is up 1.3% for the period to 26 August 2004, OMAM said.
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