Investments  

Fund review: BlackRock Asia special sits

For investors who want to access the evolving Asian market, BlackRock has launched its Asia Special Situations fund in the UK.

The fund will be managed by Andrew Swan, the head of BlackRock’s Asian Fundamental Equities team, with Emily Dong.

It will take a high-conviction and high-alpha approach and invest in a portfolio of 30 to 60 domestic companies that the management team believe will be ‘tomorrow’s winners’, regardless of their current benchmark weightings.

Its investment strategy will be similar to that of the BGF Asian Growth Leaders Fund, domiciled in Luxembourg, which has outperformed the MSCI Acc Asia ex-Japan index by 20.6 per cent to March 2014.

The Asia Special Situations fund will take an unconstrained approach and will seek to identify companies in emerging industries, while drawing on the potential for growth offered by mid-cap stocks, since these have historically offered better returns compared to large caps.

Looking for the best of the Asian equity markets, the fund plans on having a mid-cap bias and seeks to invest in the potential Asia success stories of the future.

Andrew Swan has said that he and his colleagues will be looking for new companies and new management teams that are emerging with the vibrant Asian market.

www.blackrock.co.uk

Comment

It has been a tough year for Asia, although there are many opportunities for finding value in countries such as India, and it is up to the team to make the most of this.

The managers’ decision not to make their selections based on a benchmark means they are able to take a more flexible approach. Choosing mid-cap companies as opposed to large-caps can potentially be advantageous because there is more room for growth, so focusing in on this area could yield positive results if the managers pick companies with good prospects.

In this respect, there are regions of Asia where it could be particularly advantageous to look. China in particular is going through a process of rebalancing its economy in favour of being more consumer-led, with a push for greater domestic production and consumption. There are great opportunities for companies in Asia in the particular spaces BlackRock is investing in.