67 WALL STREET, New York - January 24, 2013 - The Wall Street Transcript has just published its Investing in Asia Report. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Investing in Asia - Growth at a Reasonable Price - Longer-Term Investing - Asia Pacific Investment Theses
Companies include: Columbia Pacific/Asia A (CASAX) and many others.
In the following excerpt from the Investing in Asia Report, an experienced asset manager discusses their investment methodology for Asian portfolios:
TWST: Can you start off by introducing us to Columbia Pacific/Asia Fund?
Mr. Nomoto: The Columbia Pacific/Asia Fund is benchmarked against the MSCI All Country Asia Pacific Index, which includes 13 countries across the Asian region. The fund is uniquely designed to capture structurally valued, stable growth opportunities, mainly in the developed Asia markets such as Japan, Hong Kong, Singapore and Australia; while simultaneously capitalizing on higher growth opportunities in emerging Asian markets such as China, the Philippines, Thailand and Indonesia. The combination of these two different investment opportunities creates a well-balanced portfolio that should deliver competitive risk-adjusted returns over time. The portfolio generally consists of 80 to 120 securities, mostly equities, some cash and typically no fixed income investments.
TWST: What separates your fund from its peers? And how is it well positioned to take advantage of that opportunity?
Mr. Nomoto: Many of the Asia Pacific markets are still relatively small and, I would say, immature compared to Western markets in many ways. Asian markets, particularly emerging Asia, used to be largely macro plays where banks, telecom and energy companies dominated. But given the development of many new industries, markets and financial systems, many companies have actually emerged and been growing very rapidly.
As a result, our top-down approach remains effective to find good investment opportunities, but at the same time, we think bottom-up research is critical to find mispricing of the securities in the market. We believe that our investment process is highly effective for Asia, and that differentiates ourselves from competitors. We believe in using multiple sources of alpha, which is evaluating stocks using different methods, is a highly effective approach. We use both fundamental analysis, top-down and bottom-up, and quantitative analysis, because we believe that the combination of noncorrelated and then complementary ways of evaluating stocks is superior to any one approach.
And then there is our team. We have eight investment professionals on our team who conduct fundamental research and portfolio management, plus a quant analyst dedicated to our international products. We meet corporate management, industry professionals and sometimes government officials. We travel abroad extensively to meet management teams, and to do a on-the-ground research work - checking out factories, products, services and distribution centers, etc. We have very strong regional skills and knowledge, and we are multilingual. We are well positioned to follow many different companies in many different regions.
On top of our team's research capabilities, we have central research teams in Boston, New York and Minneapolis. We also have a quantitative research team to do an intensive research work both domestically and globally. We exchange information and ideas to leverage our expertise embedded in the firm. We believe we have the right investment process, right people and right product positioning to generate superior risk adjusted portfolio performance, what we call "5P".
TWST: You recently wrote a piece about China's plans to double its international income by 2020, comparing that to one from Japan at the beginning of 1960. Do you think China can do something like that? What will it mean to investors in the broader region if they can grow at a pace even approximating that?
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
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