Growth in Asian economies is impacting how many fund managers invest, even if they are not specifically focused on Asian markets.
For example, Credit Suisse recently marketed its Global Prestige equity fund which invests in luxury brands, among others. One of the drivers for the fund is the creation of wealth in emerging economies, such as China and Russia, and the expectation that more luxury goods will be consumed by consumers at home in these markets. Additionally, fund managers Varabott Ho and Marjorie Sonigo expect that more and more people in markets like China will use their wealth to travel to – and spend in – luxury-good hotspots like Paris.
Meanwhile, Francois Mouté, who runs the US Opportunities Funds at ABN Amro, is focusing on US companies that are benefiting from the economic boom in places like Asia.
“The US economy has mixed prospects right now,” said Mouté. “But I love the US – it has the best stock market system in the world. We have found that if we pick US companies that are exposed to the rest of the world, particularly Asia, we have a winning situation.”
The fund has been in existence for six years and returned 72% over that time.
Taking this approach to the US has led to less volatility and less dependence on the US economic cycle, Mouté said.
Many US companies have an international exposure, but Mouté is focusing on firms that support industrial expansion in emerging markets, such as US firms selling mining equipment to Asian miners.
The fund is overweight in energy and basic materials.
© fe July 2007