Since Nitin Bajaj starting managing Fidelity Asian Values (FAS) three years ago the investment trust has outperformed MSCI AC Asia Pacific ex Japan index with a net asset value (NAV) return of 50 per cent against the index's return of 48 per cent, according to Winterflood Securities as at 15 June. And the trust's discount to NAV has considerably tightened from around 12 per cent in April 2015 when Mr Bajaj stared managing it, to around 1.5 per cent.
Part of the reason for the improvement has been a change in the trust's investment focus from large-cap growth shares to smaller companies and value. But although three year numbers look good, over one year the trust has lagged MSCI AC Asia Pacific ex Japan index due to a strong rally by tech stocks. The trust does not hold some of these because Mr Bajaj has concerns on their valuations. These include Samsung Electronics (SMSD), Tencent (HKG:700) and Alibaba (US:BABA), which together account for 16 per cent of the value of the index. Over one year the trust has made NAV and share price returns of 3 per cent, against 10 per cent for the index.
But Mr Bajaj is not tempted to chase these tech stocks even though he doesn't think investor demand for them amounts to a 'bubble.'