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Lone money-making South-east Asia stock fund is changing tack

[SINGAPORE] Alan Richardson has thrived picking stocks in South-east Asia at a time when market mayhem triggered by the coronavirus pandemic blindsided investors in the region.

With a 13 per cent return, his Samsung Asean Securities Master Investment Trust (Equity) is the only fund among those with an Asean mandate to gain this year, according to data compiled by Bloomberg. That's when the MSCI Asean Index has lost more than 22 per cent and the region is home to some of the world's worst-performing national benchmarks in 2020.

Setting eyes on next year, Mr Richardson is shifting his portfolio in favour of cyclical and value shares. He expects a potential rollout of a successful Covid-19 vaccine to help accelerate the global economic recovery toward pre-virus levels, much to the benefit of old-economy stocks in South-east Asia.

"Cyclical and value sectors should begin to take over market leadership from growth and momentum," said Mr Richardson, who oversees about US$300 million in Asean equities as a Hong Kong-based fund manager at Samsung Asset Management.

"The development of a Covid-19 vaccine before the end of 2020 and mass immunisation in 2021 will support an upturn in the global business cycle."

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While Mr Richardson declined to name specific stocks he is buying as part of his new focus, he said they are likely to be from the consumer discretionary, industrials, materials and energy sectors. The shift comes after some of his bets on Covid-19 beneficiaries such as glove makers Top Glove and Supermax and technology firm Sea Ltd paid off.

Supermax has surged more than 1,400 per cent year-to-date, while Top Glove and US-listed Sea are up about 500 per cent and 321 per cent, respectively.

A victory for Joe Biden in the US presidential election is likely to add impetus to a shift toward value and cyclical stocks, Mr Richardson said.

"These trend changes will be accentuated if presidential candidate Biden and the Democrats take control of the Senate and the House of Representatives," he said. "Emerging markets and cyclical and value sectors should begin to outperform developed markets and growth and momentum sectors. I have started to shift the portfolio to reflect what I believe will take place in 2021."

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