The Fund outperformed the benchmark during the month in AUD terms.
Key contributors to relative performance:
• At the country level, China and Philippines contributed to performance.
• At the sector level, healthcare and industrials contributed to performance.
• Yonyou Network Technology, which rallied 35% in the month on positive read-through for domestic substitution from the China Party Congress.
• Hundsun Technologies rallied around 20% on strong quarterly results.
Key detractors from relative performance:
• At the country level, an underweight allocation to India and Korea detracted from performance.
• At the sector level, consumer discretionary detracted from performance.
• Holdings in Chinese internet company Baidu and e-commerce company JD.com underperformed, detracting from performance.
What is Nikko AM New Asia Nikko AM New Asia is an Managed Funds investment product that is benchmarked against World Emerging Markets Index and sits inside the Foreign Equity - Asia ex Jap Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Nikko AM New Asia has Assets Under Management of 20.87 M with a management fee of 1.03%, a performance fee of 0.00% and a buy/sell spread fee of 0.5%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Nikko AM New Asia has returned -6.22% in the last month. The previous three years have returned 3.83% annualised and 14.15% each year since inception, which is when the Nikko AM New Asia first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Nikko AM New Asia first started, the Sharpe ratio is 0.28 with an annualised volatility of 14.15%. The maximum drawdown of the investment product in the last 12 months is -23.3% and -47.59% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Nikko AM New Asia has a 12-month excess return when compared to the Foreign Equity - Asia ex Jap Index of 0.2% and -2.07% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Nikko AM New Asia has produced Alpha over the Foreign Equity - Asia ex Jap Index of -0.26% in the last 12 months and -0.15% since inception.
What are similar investment products?
For a full list of investment products in the Foreign Equity - Asia ex Jap Index category, you can click here for the Peer Investment Report.
What level of diversification will Nikko AM New Asia provide?
Nikko AM New Asia has a correlation coefficient of 0.93 and a beta of 0.87 when compared to the Foreign Equity - Asia ex Jap Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on Nikko AM New Asia and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Nikko AM New Asia with the World Emerging Markets Index?
For a full quantitative report on Nikko AM New Asia compared to the World Emerging Markets Index, you can click here.
Can I sort and compare the Nikko AM New Asia to do my own analysis?
To sort and compare the Nikko AM New Asia financial metrics, please refer to the table above.
Has the Nikko AM New Asia been independently verified by SMSF Mate?
This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
How can I invest in Nikko AM New Asia?
How do I get in contact with the Nikko AM New Asia?
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Nikko AM New Asia. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - September 30, 2022 The Fund outperformed the benchmark during the month in AUD terms.
Key contributors to relative performance:
• At the country level, Indonesia and an underweight allocation to Korea contributed to performance.
• At the sector level, financials contributed to performance. • Indonesia’s Bank Central Asia outperformed on resilient and improving loan growth, and Bank Indonesia’s first interest hikes, which should eventually filter through to higher net interest margins.
• IndusInd Bank shares outperformed as the bank confirmed a return to asset growth following a number of years of balance sheet repair under the current CEO.
Key detractors from relative performance:
• At the country level, an underweight allocation to India detracted from performance. • At the sector level, consumer discretionary detracted from performance.
• Chinese automaker Geely Automotive and Chinese supply chain finance company Linklogis Inc. both saw their shares come under pressure owing to continued concerns on both the local property sector and poor consumer confidence impacting near-term sales.
Performance Commentary - August 31, 2022 The Fund underperformed the benchmark during the month in AUD terms.
Key contributors to relative performance:
• At the sector level, financials contributed to performance.
• At the country level, an overweight allocation to Indonesia contributed to performance.
• Indonesia’s Bank Central Asia outperformed after the company revised up its loan growth guidance along with a good set of results.
• Chinese internet company Baidu also contributed, reversing losses from last month as the company continued to gain share in its cloud business and received licenses to operate fully driverless robotaxi services in Wuhan and Chongqing.
Key detractors from relative performance:
• At the sector level, our holdings in industrials, information technology and healthcare detracted from performance.
• At the country level, China and India were the main detractors of the month.
• Chinese cosmetics company Proya Cosmetics, a strong performer for the year, saw some profit taking over the month.
• Waterproof service system company Beijing Oriental Yuhong was also under pressure due to concerns about further weakness in the Chinese property market.
Performance Commentary - June 30, 2022 in the US market, with inflation being a common theme across local markets. The MSCI Asia ex Japan Index fell by 4.5% in US dollar (USD) terms. Despite this tough external environment Chinese and Hong Kong stocks were up in absolute terms over the month and quarter whilst the rest of the region was impacted by foreign currency effects. Chinese stocks made headway, returning 6.6% in USD terms as China halved the quarantine period for inbound travellers. Its reopening earlier in the month allowed factories to ramp up production and eased snags in supply chains. China held steady its benchmark lending rates again and announced its intention to make port operations more efficient to boost trade. Hong Kong also outperformed at 1.2% even as the Hong Kong Monetary Authority raised its base rate by 75bps. Market sentiment was seemingly unaffected even as most businesses in Macau were closed due to a COVID-19 outbreak, with the city opting to adhere to China’s zeroCOVID policy. Taiwan (-14.2%) and South Korea (-17.1%) fell on the back of inflationary concerns, in addition to a drop in demand, sales and orders of chips, notebooks and smartphones.
The entire ASEAN region retreated in the wake of rising inflation. The Philippines fell by 13.6% as its central bank hiked policy rates by 25bps and indicated the likelihood of an increase of the same magnitude in August to combat inflation, with the CPI increasing 5.4% in May year-on-year. Food inflation in Malaysia (-8.2%) was the highest since 2017 in May, and apart from providing cash handouts to lower-income earners, exports of food products have been curbed to secure local supplies and to cap costs. The CPI of Indonesia (-9.3%) rose 3.55% on an annual basis in May, reaching the upper limit of Bank Indonesia’s target range of 2 to 4%. Singapore (-7.5%) introduced a support package exceeding USD 1 billion for lower-income groups to mitigate higher costs and inflation, which rose 3.6% in May year-on-year, on a core inflation basis. Thailand’s (-8.4%) CPI jumped 7.1% from a year earlier, and its central bank warned that delaying rate hikes would be detrimental whilst holding its key rate at a record low to aid economic recovery.
Performance Commentary - May 31, 2022 The Fund marginally underperformed the benchmark during the month in AUD terms.
Key contributors to relative performance:
• At the sector level, materials contributed positively on the back of higher commodity prices. • At the country level, China added value owing to increased policy easing measures. • Vale Indonesia, one of the country’s largest nickel producers continued its strong performance after delivering a good set of results and benefitted from further market optimism in nickel prices. • Chinese internet company Baidu was another stock which benefitted from a good set of results, fuelling confidence in its transformation to become an AI, cloud and intelligent driving company.
Key detractors from relative performance:
• At the sector level, health care detracted from performance. • At the country level, holdings in Taiwan and Korea detracted the most. • Chinese pharmaceutical company Hutchmed underperformed after a series of negative changes. Not only did the company receive a big regulatory setback in the US for its Surufatinib drug, it also lost its highly regarded long time CEO due to his retirement.
Performance Commentary - April 30, 2022 Key contributors to relative performance:
• At the sector level, materials contributed positively. • At the country level, Taiwan and Indonesia added value. • In the energy space, our holding in Reliance Industries in India contributed notably as the outlook for refining margins improved.
• In Indonesia, holdings in Vale Indonesia, one of the country’s largest nickel producers and Merdeka Copper Gold, a copper and gold miner, contributed to performance as their shares well bid on continued elevated underlying raw material prices. Key detractors from relative performance:
• At the sector level, health care detracted from performance. • At the country level, holdings in China detracted the most owing to continued lockdowns across pockets of China. • Iflytek Co sold off circa 24% following results that revealed weaker-than-expected margins. With greater contribution from delayed government medical projects expected in the second half of 2022, the stock now looks attractively priced. • Sungrow Power also corrected sharply due to margin weakness. At the current share price, the risk-reward is particularly attractive given expected strength and resilience in demand for the company’s key products.
Performance Commentary - March 31, 2022 Key contributors to relative performance:
• At the sector level, healthcare, financial, and materials contributed positively. • At the country level, China, Hong Kong, and Indonesia added value. • iFlytek Co contributed to a performance by having upgraded its growth guidance for the year on the back of better visibility in its business outlook. • Proya Cosmetics continued to see strong demand for its flagship products from its Tmall and Douyin channels, which was especially apparent during Valentine’s Day sales period. • In the materials sector, nickel company PT Vale Indonesia and copper company PT Merdeka, which is primarily geared towards the electrification of the world, benefiting from the a strong rally in commodity prices.
Key detractors from the relative performance:
• At the sector level, industrials and information technology detracted from performance. • At the country level, Taiwan was the principal detractor. • Despite adopting a selective approach within the technology sector over the past few months, our stock holdings were not spared in a broad sell-down within the sector. The biggest detractor was Taiwan Semiconductor Manufacturing Company.
Performance Commentary - January 31, 2022 Key contributors to relative performance:
• At the sector level, consumer discretionary and financial stocks contributed positively.
• At the country level, South Korea and Taiwan added value. • Financials broadly rallied on expectations of higher rates, following the December correction. Bandhan Bank in particular, rebounded on better-than-expected credit growth, and betterthan-feared credit costs in their latest quarterly reports. • Despite the sharp corrections in the information technology sector, with some stocks seeing corrections to the tune of 30% in the month, Taiwan Semiconductor was a notable exception as it outperformed the market.
Key detractors from relative performance: • At the sector level, health care and information technology detracted from performance. • At the country level, China was the principal detractor. • In healthcare, HutchMed China was a casualty of the biotech sell-off following the US Federal Reserve’s hawkish commentary. • Geely Automobile also detracted from performance.
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