Fidelity Emerging Asia Fund W-Accumulation
3 yr rtn: 44.3% • FERS: 119
Rated Fund 2017-20. Focuses on value in Asia’s ‘true’ emerging economies
Fidelity Emerging Asia earned a silver Morningstar analyst rating in 2019 on account of it being a “very solid Asia ex-Japan equity option” with a “top-notch portfolio manager and consistent investment approach”.
The fund distinguishes itself by having higher weightings than other funds to less-developed Asian emerging economies – the ASEAN (Association of South East Asian Nations), and China and India in particular. These markets are seen as key beneficiaries of powerful growth drivers such as rapid urbanisation and rising domestic demand from an increasingly affluent middle class in Asia.
Dhananjay Phadnis, based in Hong Kong, has run the fund since 2013. Under his leadership, the portfolio has become increasingly concentrated. The number of holdings has been cut from 150-200 under his predecessor to 60-80. The portfolio had 65 positions at the end of 2019 that represent his best ideas.
He seeks to identify high-quality companies with sustainable growth prospects trading at attractive valuations. When assessing the sustainability of firms’ competitive advantages, his emphasis is on developing a thorough understanding of the supply/demand balance in industries as well as analysing the barriers to entry in a particular industry segment.
He looks for three key characteristics. First, he likes to find ‘moat stocks’ – industry leaders with the ability to generate strong returns, sustain them and reinvest at increasing rates of return. Secondly, he seeks quality management teams: companies where management has a strong track record and where interests are fully aligned with those of minority shareholders. Thirdly, he likes to buy stocks with unrecognised long-term growth potential at favourable valuations or companies where valuations and fundamental attractions have become disconnected due to short-term problems.
Narrative and ratings content all as of January 2020.See all Money Observer rated funds
|Alibaba Group Holding Ltd ADR||9.57 %|
|Tencent Holdings Ltd||8.46 %|
|Samsung Electronics Co Ltd||8.13 %|
|Taiwan Semiconductor Manufacturing Co Ltd||7.17 %|
|China Construction Bank Corp Class H||3.36 %|
|SK Hynix Inc||2.49 %|
|Bharti Airtel Ltd||2.33 %|
|Reliance Industries Ltd||2.31 %|
|Ping An Insurance (Group) Co. of China Ltd Class H||2.27 %|
|Infosys Ltd||2.07 %|
|Asia - Emerging||67.47 %|
|Asia - Developed||29.56 %|
|Financial Services||20.92 %|
|Consumer Cyclical||17.94 %|
|Communication Services||12.87 %|
|Consumer Defensive||6.17 %|
Dhananjay joined Fidelity in 2004 as an investment analyst in India. He moved to Hong Kong in 2006. As an analyst, Dhananjay covered the Asian telecommunications, consumer discretionary, industrials and materials sectors. He was promoted to Director of Research (DoR) in 2009. As DoR, he was responsible for mentoring and guiding Fidelity’s team of research analysts based in various offices in the Asia ex Japan region.
Data provided by Morningstar.
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