Fidelity Asian Values plc (LON:FAS) has announced its monthly summary for September 2024.
Portfolio Manager Commentary
The Trust’s NAV rose 7.2% during the 12-month period ended 30 September 2024, underperforming its reference index which rose by 13.8%. The Trust’s share price advanced 2.6% over the same period.
Stock selection was the key contributor to the Trust’s relative performance. Our process is driven by owning good businesses run by management we trust and owning them only when we have ample margin of safety – this often leads us to take contrarian positions as it is easier to find undervalued businesses in countries which are out of favour with investors. Following this philosophy, we have a significant percentage of our portfolio in China compared to the index but here small caps saw a sharp fall in share prices. Conversely, India, where our portfolio has a large underweight due to valuation concerns, rose strongly and outperformed the index which led to the Trust’s underperformance. From a sector perspective, selections within information technology and materials added value.
Given this approach, stock selection was the key contributor to the Trust’s relative performance. Of late, investors seem to be rotating out of growth stocks and into value names in the Asian small cap space. This trend should continue as small cap value stocks remain at a significant discount to small cap growth stocks in Asia.
Overall, the Trust was overweight consumer discretionary, financials, consumer staples and energy. At a country level, it was overweight China, Indonesia, and Australia, among others.
