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Baring ASEAN Frontiers seeks neglected opportunities

Baring ASEAN Frontiers Fund aims to exploit neglected opportunities outside India and China

Baring ASEAN Frontiers Fund aims to exploit long-term capital growth in Asia outside India and China, where manager SooHai Lim feels there are neglected opportunities. The fund invests at least 70 per cent of its assets in equities either listed in Association of South-East Asian Nations (ASEAN) countries, or which have a have a significant proportion of their assets or interests in those countries.

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It focuses on the five of these countries listed in MSCI South East Asia - Singapore, Indonesia, Malaysia, Thailand and the Philippines.

The fund can also invest in what it describes as greater China - China, Taiwan and Hong Kong - as well as frontier markets (countries not yet included in emerging market indices), examples being Vietnam, Sri Lanka and Bangladesh.

The fund has six main investment themes, which include companies that benefit from the Asian consumption boom, and companies which sell into India and China. The other four themes are companies involved in infrastructure, rising demand for soft and hard commodities, property and financial companies which benefit from asset reflation, and under valued companies in frontier markets.

While a small exposure to frontier markets has the potential to add strong growth, the lack of liquidity also increases the volatility of the fund, and Barings suggests investors in the fund have a medium to long-term horizon of at least five years.

The investment team selects stocks using a bottom-up growth at a reasonable price approach. However, Mr Lim explains that the investment themes are selected using a top-down view, while individual stocks are picked on a bottom-up basis.

The fund has outperformed its index over the year to March and for the calendar year 2009, while it has also beaten its Morningstar category, ASEAN equity, over this period.

Full data and a PDF facsheet for Baring ASEAN Frontiers is available here

BARING ASEAN FRONTIERS FUND A Dis NAV (BAAFAG)

PRICE87.04pSHARPE RATIO0.31**
SIZE OF FUND£109.133 MTH  PERFORMANCE15.73%
No OF HOLDINGS74*6 MTH PERFORMANCE21.99%
SET UP DATE01/08/2008*1 YR PERFORMANCE54.13%
MANAGER START DATE01-Aug-08TOTAL EXPENSE RATIO1.8%*
FEESInitial 5%, Annual 1.25%*YIELD0.91
VOLATILITY2.66**MINIMUM INVESTMENT£2,500
TRACKING ERROR1.75**MORE DETAILSwww.barings.com

Source: Morningstar, *Barings, **Investors Chronicle

Performance figures as at 7 May 2010

Top ten holdings

HoldingPercentage
United Overseas Bank5.80
DBS Group Holdings4.70
Bumiputra Commerce3.40
Astra International2.90
Singapore Telecom2.80
Bangkok Bank2.70
PTT Public Company2.60
Keppel Corporation2.60
Perusahaan Gas Negara2.40
SembCorp Marine2.40

Source: Barings as at March 2010

Geographic Breakdown

CountryPercentage
Singapore39.10
Indonesia22.00
Malaysia14.90
Thailand14.50
Phillippines3.30
Other6.20