Seneca Investment Managers has added Samarang Asian Prosperity Fund, a small cap pan-Asian fund run by Greg Fisher, to its portfolio.
Samarang uses traditional value investing techniques applied to the very small cap regions of the Asian markets, where companies with no analyst coverage and very little buy-side interest can be found. Since inception in 2012 to the end of 2017, the sterling denominated share class has delivered an annualised return of 20.1 per cent. This compares favourably to an index return of 13.6 per cent per annum.
“Samarang differs greatly to other funds in the Asian region, with the manager restricting fund size in order to keep the opportunity set as large as possible, focusing on delivering the best performance for clients rather than increasing its asset base,” says Tom Delic (pictured), fund manager, Seneca Investment Managers. “For example, in Vietnam, where Samarang has a large allocation, the fund focuses on the smaller cap end of the market. Here, the manager can find high return on equity operations trading at significant discounts to conservative estimates of the net asset valuation of the business. Around 15 per cent of the fund invests in utility businesses in Vietnam such as hydropower and gas distribution. Companies in the sector are trading at high single digit dividend yields with good growth prospects based on the country’s increasing industrial demands.
“This approach aligns with our own ethos of active management and multi-asset value investing, making the Samarang Asian Prosperity Fund a good fit for the Seneca Global Income & Growth Trust. We seek asset managers rather than asset gatherers.
“Our new position in the Samarang was funded by a reduction in holdings of the Aberdeen Asian Income Fund. When comparing the two funds, Samarang’s portfolio trades at around a 50 per cent discount to that of Aberdeen’s, on simple valuation metrics. The median market cap of a typical Samarang stock is GBP100 million versus a median of GBP6.2 billion in the case of Aberdeen’s portfolio.”
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