Strategy
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Asia ex Japan Equity

The cornerstone of our Asian Equity capability is predicated on the long working relationship of core team members.
Clear Philosophy & Focus

We believe that applying fundamental research to identify undervalued companies capable of achieving high sustainable returns and/or benefiting from positive structural change will lead to superior investment performance.

We depict this graphically using the following chart describing the component parts of our Nikko AM portfolio. We aim to have a balanced portfolio with the largest representation of stocks with high sustainable returns and high structural change.

The Asia region comprises diverse growth markets. Economics, politics, consumer demand, market characteristics and company developments can drive substantial and rapid change. The combination of Asia’s market diversity and continuous change means that experience and profound local market knowledge are especially critical. Concomitantly, strong and/or improving ESG factors are also fundamental to sustaining high returns.

Component Parts of Nikko AM Portfolio
Sustainable Returns
Positive Change
Independent yet integrated investment approach

Research analysts and portfolio managers are assigned individual sectors and country/regional responsibilities respectively. This structure ensures that the full spectrum of Asia ex-Japan markets is covered and allows for a more holistic and integrated approach to portfolio construction.

Our analysts also enjoy the independence to explore and take into consideration stocks that fall beyond the traditional boundaries of large-cap indices. This provides our highly experienced portfolio managers the flexibility to invest in the best investment ideas within a given market without biases towards benchmarks or market cap. Our focus is on identifying the most attractively valued companies with high sustainable return potential and positive structural change.

Large & Established Team

The cornerstone of our Asian Equity capability is predicated on the long working relationship of core team members. Some senior members of the team started working together as early as 2003, while the core team have been together at Nikko AM for over 7 years. The team is multi-cultural, multi-generational and has worked an average of seven years at Nikko AM, which has helped foster a collegiate environment of cooperation, reliability, intellectual compatibility and trust.

We pride ourselves on our collective cognitive diversity and creating a culture that allows team members to robustly challenge each other’s ideas. The team averages 18 years of relevant experience, bringing to the table extensive hands-on portfolio management expertise and analyses over different market cycles. This allows us to be better prepared for future market uncertainties and volatility.

Well-established, robust and proven investment process

Our disciplined, time-tested investment process has been constructed specifically for Asian markets based on the team’s collective beliefs and experience.

Stock-picking is the primary driver of alpha and a relatively low number of portfolio holdings ensures we back our conviction.

Extensive multi-country and multi-sector capabilities

In line with our commitment to provide sophisticated and diverse investment solutions to our clients, our team covers a wide range of strategies and sectors within the Asia ex-Japan region. Our deep regional experience allows us to deliver the very best investment opportunities.

Asia Equity Strategies
  • Asia ex Japan
  • Asia Pacific ex Japan
  • Developed Asia ex Japan
  • Asia Healthcare
  • Asia Small Cap
  • ASEAN
  • Greater China
  • China A Shares
  • India
  • Singapore
Sector Coverage
  • Healthcare
  • Technology
  • Utilities, Telecom
  • Energy, Materials
  • Financials
  • Real Estate
  • Consumer
  • Industrials
An Integrated Five-Step Investment Process
01
Opportunity Set Definition
02
Idea Generation
03
Detailed Fundamental Research
04
Portfolio Construction & Macro Overlay
05
Ongoing Risk Monitoring & Management
Opportunity Set Definition 01

The investible universe is defined by applying market capitalisation limits and liquidity screens to stocks listed in Asia ex-Japan markets.

Idea Generation 02

This step revolves around identifying undervalued stocks with the potential for sustainable returns and/or benefiting from positive structural change. All team members attend structured weekly meetings to discuss generating new stock ideas.

Detailed Fundamental Research 03

From idea generation, stocks are selected for further detailed fundamental analysis including Environmental, Social and Governance (ESG) assessment, and subsequently presented by the sector analyst to the team for discussion and a collective final stock rating.

Portfolio Construction & Macro Overlay 04

Portfolio construction includes the buying and selling of stocks based on the internal ranking system. An independent macro assessment is used to cross check country allocations resulting from bottom-up stock selection. This is to identify unintended risks and help avoid undue geo-political uncertainties.

Ongoing Risk Monitoring & Management 05

Involves daily portfolio risk management processes managed by independent risk teams spanning four functions, namely Investment Management, Risk Management, Investment Compliance and Enterprise Risk Management.

Key Characteristics
  • Style & benchmark agnostic
  • Driven by fundamental views & conviction
  • Focus on sustainable returns and positive change
  • Bottom-up stock selection
  • Three-year or longer research outlook
  • Concentrated portfolios
ESG Implementation

As ESG research is integrated into our fundamental research process, it is undertaken by our team of analysts and portfolio managers, and it is considered together with input from external ESG research and data providers.

Our ESG evaluation process starts with identifying the key issues that will be material for shareholder returns for each company we cover. These issues could be risks to returns, which include potentially disruptive events, and risks that lead to a gradual erosion of shareholder returns. The issues also include ESG opportunities, which could result in a material enhancement of shareholder returns.

Once the issues are identified, we evaluate the ESG performance of the companies with regard to each issue. We assess how firms are mitigating risks and accessing ESG-related opportunities. This evaluation then feeds into our overall rating of sustainable returns and fundamental change for the company. We also apply an ESG flag to companies we deem to be not investible, whether due to unacceptable risks or poor ESG performance with no evidence of improvement.

Finally, we identify key issues for continuing engagement with the companies we cover. These include outstanding ESG issues that companies are in the process of resolving or opportunities that are being developed. If appropriate, we will suggest options that best enhance shareholder returns.

Important Information

The funds mentioned are Singapore registered funds approved for sale or purchase in Singapore. By proceeding, you are representing and warranting that you are either resident in Singapore or the applicable laws and regulations of your jurisdiction allow you to access the information.

The information on this website is not intended to be an offer, or a solicitation of an offer, to buy or sell any product or service to any person in any jurisdiction where such offer, solicitation, purchase or sale would be unlawful under the laws of such jurisdiction.

This website may contain links to the website of certain overseas affiliates of Nikko Asset Management Asia Limited (“Nikko AM Asia”). However, providing such links should not be considered as offering or solicitation by Nikko AM Asia of any product or service of its affiliates to any person.

This website is purely for informational purposes only with no consideration given to the specific investment objective, financial situation and particular needs of any specific person. It should not be relied upon as financial advice. The mention of individual securities, sectors, regions or countries within this website are for illustration purposes only and does not imply a recommendation to buy or sell. You should seek advice from a financial adviser before making any investment. In the event that you choose not to do so, you should consider whether the investment selected is suitable for you. Investments in funds are not deposits in, obligations of, or guaranteed or insured by Nikko AM Asia.

Past performance or any prediction, projection or forecast is not indicative of future performance. The Funds or any underlying funds may use or invest in financial derivative instruments. The value of units and income from them may fall or rise. Investments in the Funds are subject to investment risks, including the possible loss of principal amount invested. You should read the relevant prospectus (including the risk warnings) and product highlights sheet of the Funds, which are available and may be obtained from appointed distributors of Nikko AM Asia or our website (www.nikkoam.com.sg) before deciding whether to invest in the Funds.

The information contained herein may not be copied, reproduced or redistributed without the express consent of Nikko AM Asia. While reasonable care has been taken to ensure the accuracy of the information as at the date of publication, Nikko AM Asia does not give any warranty or representation, either express or implied, and expressly disclaims liability for any errors or omissions. Information may be subject to change without notice. Nikko AM Asia accepts no liability for any loss, indirect or consequential damages, arising from any use of or reliance on this website.

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