Best In Class  

Best in Class: Schroder Asian Alpha Plus

Best in Class: Schroder Asian Alpha Plus

It is out with the dog and in with the pig as today marks the Chinese New Year.

It is an event which effectively creates two to four weeks of silence across the country (once the fireworks have stopped) to mark the celebrations.

Some interesting traditions surrounding Chinese New Year include that it brings about the world’s largest annual migration, with over 200m mainland Chinese travelling long distances to reunite with their families.

Superstitions are also popular, with people not allowed to wash their hair or clothes on the first day of the year as it is seen as “washing one’s fortunes away”; sweeping up and taking out garbage is also viewed as bad luck.

A better-known tradition at Chinese New Year is the passing of red envelopes to people of all ages – as a way of sending both luck and money.

The Chinese government could perhaps do with a few red envelopes being sent its way at the moment as it seeks to meet the dual challenge of the economy slowing and the ongoing trade war dispute with the US.

At 6.6 per cent, China’s economic expansion last year 'languished' to its slowest pace of growth since 1990.

While it is a growth rate envied by the developed world, as the second largest global economy, China’s ripple effect plays a key role in the outlook of the wider Asia Pacific region and indeed the rest of the world, so it is monitored closely.

2018 was a challenging year for Asian equities with the MSCI AC Asia ex Japan index recording a loss of 9 per cent, according to data from FE Analytics for the calendar year 2018.

Other non-China-related factors have also played their part; notably the impact of higher oil prices, as well as rising interest rates in the likes of India, Indonesia and the Philippines.

But the manager of this week’s 'Best in Class', the Schroder Asian Alpha Plus fund, believes the current environment in Asia offers value to investors.

Matthew Dobbs commented: “On the valuation front, Asian equities in aggregate now trade close to the levels seen during the last period when regional markets experienced a downdraft in late 2015 and early 2016.

“Despite the trade issues, we are still finding a number of good opportunities among selected Asian exporters.”

Mr Dobbs has managed the fund since its launch in November 2007, with returns of 361.9 per cent in the past decade alone, based on data from FE Analytics in the 10 years to January 28 2018 – compared to 197.3 per cent for the IA Asia Pacific ex-Japan sector.

He joined Schroders in 1981 and has been managing Asian equity portfolios since 1985 and this fund is one of a number of Asian vehicles he runs.