GLG Asia (ex-Japan) Equity
GLG Asia (ex-Japan) Equity is a long only, style agnostic, fundamentally driven strategy. The team look to capture the turning points in earnings revisions where there has historically been significant potential to generate alpha.
- The investment team is led by Andrew Swan who is a highly experienced and established Asian Equity portfolio manager
- The investment strategy has been developed and refined over a period of 9+ years
- The strategy is centered around bottom-up analysis with a focus on relative earnings revisions
- High conviction all-cap portfolio with preference for mid-caps
- Style agnostic approach with flexibility to shift in/out of styles
Approach
The strategy uses a combination of top down and bottom up concentrated risk-taking with the stated objective of alpha or excess return through the economic cycle. The majority of risk relative to the benchmark and the majority of returns is expected to be achieved through idiosyncratic, stock specific risk taking.
Underpinning the investment philosophy is the notion that the main drivers of alpha in Asia (ex-Japan) equity markets are high cross-sectional single stock dispersion and relative earnings revisions. As such, the team’s core focus is to capture turning points in companies that have high EPS revision potential over a forecast period of up to 12-18 months.
The team conduct detailed fundamental analysis and financial modelling on companies across the region to identify candidates with the highest EPS revision potential. The aim of this process is to identify sources of potential surprise (positive or negative) in the company’s key profit drivers such as revenue, costs, margins, cash flows and ultimately earnings per share. These sources of surprise can be derived by many factors including management strategy and operational decision making, competitive dynamics, macro and micro economic factors.
In addition to bottom up risk taking, the team will overlay various deliberate and diversified top down macro views in order to achieve the stated objective of “through the cycle” alpha.
| Approach | Long-only |
| Asset Class | Equity |
| Geographic Focus | Asia (ex-Japan) |
| Benchmark | MSCI All-Country Asia (ex-Japan) |
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Considerations
One should carefully consider the risks associated with investing, whether the strategy suits your investment requirements and whether you have sufficient resources to bear any losses which may result from an investment:
Investment Objective Risk - There is no guarantee that the Strategy will achieve its investment objective.
Market Risk - The Strategy is subject to normal market fluctuations and the risks associated with investing in international securities markets and therefore the value of your investment and the income from it may rise as well as fall and you may not get back the amount originally invested.
Counterparty Risk - The Strategy will be exposed to credit risk on counterparties with which it trades in relation to on-exchange traded instruments such as futures and options and where applicable, ‘over-the- counter’("OTC","non-exchange") transactions. OTC instruments may also be less liquid and are not afforded the same protections that may apply to participants trading instruments on an organised exchange.
Currency Risk - The value of investments designated in another currency may rise and fall due to exchange rate fluctuations. Adverse movements in currency exchange rates may result in a decrease in return and a loss of capital. It may not be possible or practicable to successfully hedge against the currency risk exposure in all circumstances.
Liquidity Risk - The Strategy may make investments or hold trading positions in markets that are volatile and which may become illiquid. Timely and cost efficient sale of trading positions can be impaired by decreased trading volume and/or increased price volatility..
Concentration Risk - The Strategy invests in a limited number of investments may be held which can increase the volatility of performance.
Financial Derivatives - The Strategy will invest financial derivative instruments ("FDI") (instruments whose prices are dependent on one or more underlying asset) to achieve its investment objective. The use of FDI involves additional risks such as high sensitivity to price movements of the asset on which it is based. The extensive use of FDI may significantly multiply the gains or losses.
Leverage - The Strategy's use of FDI may result in increased leverage which may lead to significant losses.
Emerging Markets - The Strategy may invest a significant proportion of its assets in securities with exposure to emerging markets which involve additional risks relating to matters such as the illiquidity of securities and the potentially volatile nature of markets not typically associated with investing in other more established economies or markets.
Single Region/Country Risk - The Strategy is a specialist country-specific Strategy or focuses on a particular geographic region, the investment carries greater risk than a more internationally diversified portfolio.
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