iVenture investment management


Market update - August 2020

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Market Review & Fund Commentary

MSCI FExJ returned 7.8% in June, outperforming MSCI AC World by 2.7%. Equities were supported by robust quarterly earnings from the Internet sector, progress on vaccine development and government supportive measures. Regional performance was boosted by dollar weakness and positive earnings revisions to North Asia. Top performers were Tech (+17.5%), Consumer Discretionary (+12.6%), and the Materials (+9.3%) sector. MSCI Taiwan was the best performing market advancing 14.9%. The strong performance was driven solely by the Tech sector on upbeat earnings and guidance. Taiwan export orders rose 6.5% YoY in June, its most since 2018, and electronics export orders grew 23.9% YoY. MSCI India (+10.1%) outperformed in July despite relentless increase in daily new COVID-19 cases and earnings downgrades. The rally as such lacked breath and was solely led by large caps Infosys and RIL. India recorded its highest single-day increase in new COVID-19 cases at 57,000+ during the month. MSCI China (+8.9%) also outperformed in July led by a liquidity-driven rally in domestic Ashares. Materials (+21.6%) was the best performer as industrial production and fixed asset investment further picked up. Domestic demand however remained lukewarm with a small sequential recovery. ASEAN markets remained underperformers of the region for the month as they failed to benefit from positive earnings revisions to the Tech sector. EM equity funds saw net subscriptions of $1.4bn in July and investors were net buyers of AEJ funds but sellers across other EM regions.

The fund performed 6.4% in July and underperformed MSCI FExJ by 1.4%. In Hong Kong, the fund closed its position in Kingboard Laminates, a basic materials stock, after returning more than 30% in three months. Funds made available were used to initiate a position in First Tractor, a Chinese SOE that manufactures agricultural machinery such as tractors and harvesting machines, as a top beneficiary of rising food security concerns. Top 2 holdings Tencent and Techtronic were each trimmed for profits of more than 420% and 590% respectively. The fund re-accumulated the reduced shares in Pacific Basin from June after its share price fell more than 15%. HKTV, the ecommerce leader in Hong Kong, became one of the top 10 positions after its share price surged more than 75% since our initiation a month ago. In Taiwan, the fund initiated a position in face mask and hygienic material producer Nan Liu and accumulated more shares in Cathay Financial. In Korea, Samsung was reduced for profits as memory price weakened despite rising work-from-home demand, indicating a worrying potential oversupply situation. In Indonesia, the fund consolidated its positions by removing flag carrier GIAA, pharmaceutical player KLBF, construction contractor WIKA and specialty store operator MAPI to add to existing positions in state owned bank BBRI, industrial estate BEST and smartphone retailer ERAA. The fund built a position in animal feed and poultry farmer JPFA on rising food security concerns. In Thailand, the fund reduced its position in Erawan Group as COVID-19 drag on tourism persisted. In Vietnam, the addition to VEIL boosted the position to the fund’s top 10.


 

Investment objective and style

The Fund aims to provide investors with long-term capital growth, by investing primarily in listed equities of companies in the Asian Region.

iVenture's investment style is absolute return, active and un-benchmarked, with a long bias. We believe in creating value through active management. Rigorous stock selection through in-house research generating ideas of conviction through due diligence, is a cornerstone of iVenture’s approach to investment. Country and sector allocation is unconstrained by benchmarks.

Stocks are carefully selected, employing the conviction borne of iVenture’s in-house fundamental research and the experience of several market cycles, assisting risk assessment and leading to out-performance. While maintaining a long-term perspective, a disciplined approach to investment is applied. Incorporating regular performance reviews, price targets are determined before investments are initiated and strictly applied in the execution of an exit strategy.

The portfolio is focused and consists only high conviction ideas, and typically holds not more than 50 stocks.


  NAV per share: US$37.81 (as at 31 July 2020)  


 Investment Objective: Long term capital growth through investment in listed Asian equities


 Investment Style: Absolute long-term return; active stock selection; long only


  Fees
Management: 1.5% p.a.
Performance: 20% of profit vs. high watermark
Redemption: 0.5%


  Fund Size: US$ 7.61 million
Dealing: Monthly, on first business day
Domicile: Cayman Islands
Launch Date: 20 November 2000


  Administrator: DBS Bank Ltd., Hong Kong Branch
Auditor: BDO
Investment Manager: iVenture Investment Mgt Ltd

 


iVim AOF Sector Allocation

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iVim AOF Country Allocation

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