Threadneedle Asia Fund announce strong performance

Threadneedle Investments today announced strong performance of the Threadneedle Asia Fund.

Over five years, the fund has returned 100.4% against the sector median of 87.4% and is top quartile over one, three and five years.

Threadneedle is committed to the Asian market and recognises the wealth of opportunities in the sector for 2007.

In addition, Standard & Poor’s, the rating agency, has upgraded the Threadneedle Asia Fund to AA rating. The upgrade, from A, is in recognition of the excellent work that Vanessa Donegan has done with the fund since she became manager in February 2002. In its recent note on the fund, S&P recognises the strength of the team and the clear contributions to the performance of the fund.

During the last year, Threadneedle has expanded its Asian equity team with the addition of key hire, Jan de Bruijn, a senior fund manager specialising in Korea and Taiwan and global head of technology. Jan joined Vanessa Donegan, lead Fund Manager of the Asia Fund, and Gigi Chan, a fund manager covering the energy, consumer, telecoms and healthcare sectors.

The fund provides diverse exposure to Asian and Australian stocks and aims to outperform the Lipper peer group benchmark. Vanessa’s approach combines Threadneedle’s macroeconomic and thematic views with rigorous proprietary bottom-up research. The fund’s performance has benefited from being underweight in Korea and Taiwan, a strategy implemented by Jan, and Gigi’s experience in the Chinese market has been instrumental to the fund’s returns.

The stock selection process covers several aspects, including dividend growth, improving cash flows, pricing power and management quality. Companies with strong balance sheets and a competitive edge are also sought, particularly those that appear to be undervalued by the market.

Consistent with other Threadneedle equity offerings, the composition of the portfolio is governed by the team’s preferred list, essentially a selection of the top 20 stocks in the region as well as a limited number of stocks on a core buy list. In addition, Vanessa has been able to research off-benchmark opportunities and has used this process to venture into India and Pakistan, for example, to find undervalued stocks making a useful contribution to fund returns.

Vanessa Donegan, Fund Manager of the Threadneedle Asia Fund, who has 20 years experience at Threadneedle said, “I am delighted with the upgrade, particularly as it comes just before my fifth anniversary of being a fund manager on the fund. I am particularly pleased that the fund’s outperformance over the last five years has come from a combination of thematic positioning and effective stock selection.”

She continued: “Asian stock markets have seen a lot of change in the past five years and the fact that the Fund returns have been consistently good demonstrates our ability to outperform in all market conditions. Over the past year or so, in particular, the fund has benefited from reduced exposure to Korea and Taiwan, both of which have struggled to make any headway recently. Increasing investment in domestic Chinese companies, property stocks in Singapore and Hong Kong and Indonesian, Singaporean and Thai banks have also been very rewarding.”