Smith & Williamson Far Eastern Income and Growth Fund B
Rated Fund 2018-19. Targets both growth and income
Smith & Williamson Far Eastern Income and Growth has had a disappointing year since becoming one of our Rated Funds in 2018. However, this is due to its lower allocation to better-performing Japanese equities than to stronger performers in the fund’s peer group.
It has a reasonable yield of 2.2%, paid annually, and has beaten its MSCI Pacific benchmark over three- and five-year periods.
As the fund’s name suggests, it seeks both income and long-term capital growth by investing in the Far East (Asia Pacific) region, including Japan, Australia and India. Japan is its largest country weighting, but it has almost 5% less in the country than the index.
The fund was launched almost 30 years ago, yet it remains a tiddler at around £38 million. It only started targeting income in 2013, when it changed its name from Smith & Williamson Far Eastern Growth Trust to reflect a change to its investment objective.
Its manager, Jane Andrews, has been actively involved in investing since the 1980s. She has been this fund’s manager since she joined Smith & Williamson in 1996.
Far Eastern Income and Growth has around 70 holdings, typically in high-quality firms operating in niche markets with structural growth potential. Andrews says these companies are more in charge of their own destinies than those producing undifferentiated or commoditised products, as there is regional and global oversupply.
She has a bias towards medium-sized companies, which she expects to be important drivers of longer-term returns. At a sector level, the fund is tilted away from banks, as Andrews finds large Australian banks unattractive.
Narrative and ratings content all as of January 2019.See all Money Observer rated funds
|AIA Group Ltd||2.82 %|
|CSL Ltd||2.71 %|
|Housing Development Finance Corp Ltd||2.67 %|
|Ping An Insurance (Group) Co. of China Ltd Class H||2.57 %|
|Tencent Holdings Ltd||2.30 %|
|oRo Co Ltd||2.29 %|
|NWS Holdings Ltd||2.27 %|
|Daiichi Sankyo Co Ltd||2.21 %|
|Alibaba Group Holding Ltd ADR||2.13 %|
|Keppel DC REIT||2.04 %|
|Asia - Developed||34.80 %|
|Asia - Emerging||20.17 %|
|Financial Services||19.40 %|
|Real Estate||8.78 %|
|Consumer Cyclical||7.39 %|
|Consumer Defensive||6.60 %|
|Basic materials||5.63 %|
|Communication Services||5.56 %|
Jane joined Smith & Williamson in 1996 and has managed the Smith & Williamson Far Eastern Growth Trust for over 15 years. She also manages the Smith & Williamson Oriental Growth Fund. Jane’s career began with Midland Bank working on Asian investments for an international pension fund. In 1987 she moved to John Govett to manage the Pacific Income Fund, winning a performance award in 1988. A tenure at CIM fund managers, where she ran dedicated Japanese & Asian pension funds, preceded her career at Smith & Williamson. Jane is also involved in the monthly strategy meetings advising on Far Eastern Markets.
Data provided by Morningstar.
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