iVenture investment management

Market update - September 2020

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Market Review & Fund Commentary

MSCI FExJ returned 3.4% in August, underperforming MSCI AC World by 2.6%. Equities extended their rally on signs of economic recovery and more flexible inflation target from the Fed. COVID-19 continued to spread with number of cases surpassing 25 million globally, up from 10 million at the start of July. Governments responded to the second wave with targeted measures, including travel restrictions from high risk regions and requirements to wear face masks in public, instead of nationwide lockdowns. Geopolitical tensions drew the most attention for the region. The Trump administration signed executive orders to ban Tiktok and Wechat from the US, and added 38 Huawei-affiliated companies to the Entity list for export controls after announcing The Clean Network program. India also followed to ban dozens of Chinese apps as clashes continued along its Chinese border. Top performing sectors were Consumer Discretionary (+13.6%) and Materials (+4.4%) that benefit most from economic recovery while Communication Services (+1.1%) and Tech (- 1.9%) were among the worst. Most AEJ currencies appreciated against the dollar and EM equity funds saw net subscriptions of US$576mn up to 26 August.

The fund returned 8.4% in August and outperformed MSCI FExJ by 5.0%. Performance was driven by the fund's stock picking strategy and its overweight in Materials sector. Among the top holdings, Pacific Basin, Techtronic, HKTV and Semen Indonesia each returned 18.9%, 21.6%, 36.2% and 14.4% respectively. In Hong Kong, the fund reduce its position in Tencent after the internet giant's apps were targeted by both US and India. Positions in HKTV and Techtronic were trimmed for profits of more than 100% and 700% respectively. Funds made available were used to build a position in oilfield services provider COSL as rig utilizations started to recover in August. The fund significantly reduced its Tech sector weight to 5.7% from 11.9% a month earlier. In Taiwan, the fund trimmed its position in semiconductor giant TSMC for more than 55% profits. In Korea, the fund closed its position in Samsung Electronics for some profits. Funds made available were used to initiate a position in sports goods company Fila Holdings, which not only owns the wellknown athleisure brand Fila but also a controlling stake in golf brands Titleist, FootJoy and Scotty Cameron. The golf brands make up half of the company's profit and sales have fully recovered with a 25% on year gain in June from 68% on year decline in April as the social-distancing friendly sport gained popularity. In Indonesia, the fund initiated a position in automaker ASII as a top beneficiary of economic recovery. Positions in BBRI, ERAA and INKP were all trimmed for profits and cash raised were used to add to Japfa Comfeed, further increasing the fund's exposure to food inflation. In Thailand, the fund exited its investments in hotel and mall operator MBK and funds made available were used to initiate a position in Bangkok Bank.


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$40.99 (as at 31 August 2020)  

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

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

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

  Fund Size: US$ 7.53 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


iVim AOF Country Allocation