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One of the true competitive advantages we believe we have at FSSA is a genuine long-term investment horizon. For us, investing is not about trying to predict which stocks will rise or fall next month or quarter; rather, it is a non-speculative activity aimed at participating in the long-term value creation we believe the best companies can generate.

Though Covid hasn’t yet finished with us, the markets have finished with Covid. In real life, there is still plenty of misery to go around, but in our opinion things have seldom been better for investors.

Fund Manager Q&A

FSSA Investment Managers has been investing in Asia and global emerging markets for three decades.

Since our last update, global markets have not been short of action and the manic behaviour characterising today’s markets has taken investors on another rollercoaster ride. While not quite comparable to the market movements seen during the dark days of March 2020, the recent correction — especially in China-related companies — has been notable.

Over the past few years, global emerging market (GEM) investors have dealt with a series of challenges, including a surging pandemic, local lockdowns and widespread travel restrictions.

Albert Einstein famously said, “Not everything that can be counted counts and not everything that counts can be counted.” This holds true in many situations, but we think it is especially true when it comes to risk management.

In our last client update, written through the depths of Covid-despair, we observed that real life and the world of markets are seldom so intimately entwined. With markets swinging violently to the downside on a riptide of fear, it was clear even then that activity was being driven by short-term anxiety rather than a real evaluation of Asia’s longer-term value-accretion prospects.

As the world continues to lurch from Covid-surges to reflexive and localised lock-downs, everybody is now looking through to a mythical status quo ante bellum – the before-Covid-times, when the world was just hunky-dory.

As many economies have bounced back from the worst of the pandemic, concerns about central banks, the rate of money-printing and inflation have returned. Markets have responded to the arrival of better times by selling off bonds and bond-like equities.

As Asian countries become richer, they have been transitioning towards consumption-based economies, translating higher per capita income into increased spending across goods and services.

Many people seem to think that money management is about predicting the future. But even with the gift of perfect foresight, the subsequent market reaction to news is often far from obvious.

Every downturn is different – the Global Financial Crisis and the Asian Financial Crisis were primarily debt-related, while SARS and Covid are obviously health-related, with a knock-on effect on growth and consumption.

Top Glove is one company identified as part of this engagement as having high exposure to modern slavery risk in light of the COVID-19 pandemic. The company is the world’s largest manufacturer of rubber gloves, specialising in examination, surgical, household and industrial gloves.

Richard Jones and Rizi Mohanty from FSSA Investment Managers discuss the silver lining in Asia Pacific markets in a Q&A.

Investment management is an industry where in the short run there is usually little relationship between process and outcome. In the long run, however, the link is very strong.

As long-term, bottom-up investors, our starting point for finding suitable investments is to seek out companies that benefit from structural tailwinds and have clearly-defined competitive advantages.

At FSSA Investment Managers, we believe that meeting management teams is crucial in assessing the quality of a company.

Looking back (though it’s not like we didn’t already know), it is clear that we have been living in an increasingly distorted world. Financially, for the last decade, it has been about interest rates falling to (and staying at) zero in a world of general money printing.

As investors focused on quality, one can easily “fall in love” with an investment and be too forgiving in certain situations, potentially missing important warning signs or sell signals. One question that we frequently get relates to a common behavioural bias for quality investors: how do we balance admiration for a company without becoming too complacent?

The year 2023 turned out to be fairly pedestrian in terms of emerging markets’ performance. The asset class was weighed down by China, which recorded its third consecutive year of negative returns.

In the FSSA GEM Focus strategy we own high-quality businesses which have competitive advantages such as strong brands, distribution advantages, cost leadership, or simply providing a service/product that customers cannot live without. Historically, this has given them pricing power and the ability to preserve margins despite adverse headwinds.

Information on this site is provided by First Sentier Investors, a global asset management business. First Sentier Investors is ultimately owned by Mitsubishi UFJ Financial Group, Inc MUFG.

Contact the relevant offices for enquiries and further information.

I started my career more than 18 years ago as a developed markets consumer analyst. It was a great introduction to investing – the consumer sector is extremely broad so I was able to gain experience across many sub-industries and look at a wide variety of companies.

In response to the recent client interest around China’s stock market and the challenging performance year-to-date, we had a conversation with Martin Lau, managing partner and lead portfolio manager to a number of Asia Pacific and Greater China equity strategies.

Markets will always do their best to push us to act in a short-term and emotional manner, particularly at times when events become somewhat extreme. These days all of us, market participants or not, seem almost entirely focused on uncertainty rather than promise. This is why having a strong philosophy and process is crucial.

Learn about FSSAIM fund prices and keep track of performance with our comprehensive document library.

Discover our range of APAC & Emerging Markets (EM) funds today. FSSAIM are investment specialists for China, India, Japan and emerging market equities.

Only by constantly questioning each other and the investment case for our portfolio holdings can we ensure that we stay focused in generating sustainable, long-term returns for our clients.

Read the latest news and investment insights from FSSAIM's leading investment experts. We're specialists in APAC and Global Emerging Markets investments.

As responsible, long-term shareholders, we have integrated ESG analysis into our investment process and engage extensively on environmental, labour and governance issues.

At FSSA, we have always believed that sustainability challenges and opportunities are a core part of investment fundamentals and can have an outsized impact on a company’s returns.

There are a number of industries that we either exclude in their entirety or where we apply thresholds. Applying thresholds affords us the opportunity to engage with the company on parts of their business that are less sustainable than others.

We have a distinct culture and team structure, which has contributed to the stability of the team. Around half of our analysts joined as graduates; and the majority of our portfolio managers have been with us for most of their careers.

Operating as an autonomous team within the First Sentier Investors Group, we are bottom-up investors, using fundamental research and analysis to construct high-conviction portfolios.

This Privacy notice relates to First Sentier Investors Australia. We believe protecting your personal information and being clear about what we do with it is a vital part of our relationship with you.

As allocators of capital and stewards of our clients’ assets, we recognise that the decisions we make as investors can influence the nature and speed of the transition to a low carbon global economy.

View the latest price and performance (%) of our funds.

Operating as an autonomous investment team within First Sentier Investors group, we are a team of dedicated investment professionals based in Hong Kong and Singapore.

We are looking for people who have a passion for business and investing to join the team and provide a different perspective on companies.

Dairy Farm, a leading pan-Asian retailing group, is an example of a dominant consumer franchise we like to own. As part of the Jardine Group, it has a long history of family ownership and stewardship (130 years).