Fidelity Asia Fund

Fidelity Asia Fund
Fund fact sheet Invest now

About this fund

A concentrated portfolio of typically 20-30 stocks across Asia.

Uses a bottom-up stock selection process that favours companies with a compelling business model, above-average earnings rate, increasing returns on equity over time and attractive valuations.

A disciplined portfolio construction process with a focus on diversification and risk management.

 

Why this fund

A concentrated approach, so that you can access our best ideas in Asia

Informed by 50+ years' experience investing in the region

Access to 60+ on-the-ground research professionals in Asia

Anthony Srom's latest insights

Meet Anthony Srom

Anthony Srom, Portfolio Manager of the Fidelity Asia Fund describes the most important factors of his investment process, how he finds his best ideas from around Asia and the importance of managing risk.

Why you should consider the Fidelity Asia Fund

Portfolio Manager, Anthony Srom for the Fidelity Asia Fund explains the key tenants of the Fund's outperformance and why he thinks this makes it a good choice for those wanting exposure to Asia.

Key facts

Unit prices (at 05/12/24)
Buy 27.3089 / Sell 27.1455
Unit price history
Buy/sell spread
0.30%/0.30%

At a glance

Objective
To achieve returns in excess of the MSCI All Country Asia ex-Japan Index NR over the medium to long term.
Benchmark
MSCI All Country Asia ex-Japan Index NR
Management costs1
1.16% p.a.
Fund size (at 05/12/24)
A$970.02M
Inception date
29 September 2005
Distribution frequency
Annually
Currency
Australian dollar

Unique identifiers

APIR code
FID0010AU
ARSN code
116072498
mFund code
FIL10

Fund manager

Anthony Srom
Singapore

If the third quarter was a sports match, we were behind until the last ten minutes then we came roaring back as everything clicked and we ended up performing, outperforming the benchmark by returning 8.5% against the benchmark return of 6.3%.

A lot of that was driven by the turnaround in our Hong Kong and China holdings. So, stocks like AIA, an insurance business in Hong Kong, Techtronic, a power tools business and Yum China who own the KFC and Pizza Hut franchises in China. These are very much examples of stocks that were grinding out decent earnings and returns but were just completely smashed for most of the year because they are Chinese consumer stocks, an area of the market that the market is very, very negative towards or has been very negative towards. But they've been churning out returns and earnings and as sentiment turned as it did right towards the end of the quarter, those stocks got significant support and they produced some very strong returns for us.

Also, in terms of contributors, we are underweight in Taiwan where we’re quite negative towards the tech sector, and of course, Taiwan is a very tech heavy market. And then we had some nice contributions as well from new positions such as CP All in Thailand where we're seeing tourists return to Thailand and with that, we're seeing same store sales growth in 7-Eleven stores which CP All own, and margin improvements as well.

But it wasn't all good news. We do have some detractors as well. So HDFC Bank, the biggest privately managed bank in India, just didn't really do anything during the quarter, and essentially flatlined. There's some concerns around lower loan growth going forward. So probably 8 to 10% loan growth for the rest of the year. And with that we've seen some earnings cuts as well which has been reflected in a relatively weaker share price performance. We think the earnings cuts are coming towards the end and valuations are actually very supportive from here.

And one other detractor of note as well is Samsung. We are generally seeing some of the steam, the hype and the steam come out of the tech sector, particularly towards AI. We've turned relatively negative I would say on that whole sector. We think that it can't continue to grow at an exceptionally fast rate and maybe the market's expectations were a little bit too exuberant compared to the reality of the fundamentals.

With Samsung, we saw that they came out with some relatively decent earnings particularly around D-RAM memory and it had some relatively positive news towards high bandwidth memory as well which they're moving into and is a key part of their AI business.

However, the market didn't really do anything and that told us that maybe there is that steam coming out of the whole AI theme which gave us cause for concern. And we've also completely sold out of the position now because we feared that there may be a buildup of potential inventory in the D-RAM spaces. PC and smartphone companies were essentially front-loading D-RAM memory spending for fears that maybe D-RAM pricing will be going up. So, we're completely out of Samsung here but it was a detractor over the quarter.

The biggest game in town right now is of course China. So, towards the end of the quarter, we finally saw some meaningful stimulus which got the market quite excited. It started off with easing the monetary conditions. So, rate cuts and so on, which was a nice signal to the market that there were easing conditions ahead and that was quickly followed up by announcements that there will be some fiscal stimulus. Now from here, we need to see what that fiscal stimulus actually is.

We don't really have the granular detail but there are pretty lofty expectations now that there will be a lot of targeted fiscal stimulus towards areas linked to the consumer and hopefully even in the property market. And if they come through and the heightened expectations of the market are met, we could see some really strong returns on the China market. But it is quite policy, and I would say message driven as we look ahead, particularly towards the end of this year.

If it comes through, then we could finally see this long-awaited rerating of the China market. We have seen some sharp share price rallies in recent weeks and that could be prolonged if that messaging is clear and also the packages that are announced on the fiscal stimulus side are deemed big enough to address some of the quite hefty problems that we've seen in the China market.

Outside of China where we are relatively excited if this comes through, we are, I would say, relatively more tepid when it comes to India. Yes, the broad macro story and the development story there is great. But share price valuations and very, very expensive and it's almost like there's no risk priced into the stocks. That to us is a concern.

But where we are also, I would say relatively more positive going forward is in the ASEAN markets. The ASEAN markets have been the forgotten child. No one's talked about them for many years. They've just fallen off a cliff in terms of people's memory. And for us, those markets are becoming exciting and interesting because we are seeing some relatively positive changes there. As I've mentioned earlier, Thailand is starting to see the tourists coming through the gate. That's good for the Thai economy.

We're starting to see markets like the Philippines grinding back after quite a few years in the doldrums when it comes to the macro scenario. So for us the ASEAN markets where they've been completely forgotten, teamed with what looks like a slightly more improved macro environment, could actually produce some decent returns for us at the stock level.

Join Investment Director Gary Monaghan as he provides an update on Asian markets, looks at the main contributors and detractors to performance and how positioning for the portfolio is currently given the outlook.

You can get more information about the Fund's top holdings here.

Performance2

See for yourself how the fund has performed since inception. The chart below represents the value now of $10,000 invested in the Fidelity Asia Fund in September 2005 compared with $10,000 invested in the MSCI All Country Asia ex-Japan Index NR.

Chart as at: 30 November 2024

Total net returns represent past performance only. Past performance is not a reliable indicator of future performance. Returns of the Fund can be volatile and in some periods may be negative. The return of capital is not guaranteed. Benchmark: MSCI AC Asia ex-Japan Index NR, effective 1 January 2010. Benchmark data prior to 1 January 2010 is a blend of the MSCI Asia ex-Japan index and the MSCI All Country Asia ex-Japan Index NR: NR at the end of the benchmark name indicates the return is calculated including reinvesting net dividends. The dividend is reinvested after deduction of withholding tax, applying the withholding tax rate to non-resident individuals who do not benefit from double taxation treaties.

Net returns as at 30 November 2024

Timeframe 1 yr
%
3 yr
% pa
5 yr
% pa
7 yr
% pa
10 yr
% pa
15 yr
% pa
Since inception
(29/09/05) % pa
Fund 12.91 1.26 6.34 8.25 11.01 11.12 9.70
Benchmark 17.78 1.64 4.66 4.63 7.16 7.57 7.21
Active return -4.87 -0.38 1.68 3.62 3.85 3.55 2.49

Total net returns represent past performance only. Past performance is not a reliable indicator of future performance. Returns of the Fund can be volatile and in some periods may be negative. The return of capital is not guaranteed. Benchmark: MSCI AC Asia ex-Japan Index NR, effective 1 January 2010. Benchmark data prior to 1 January 2010 is a blend of the MSCI Asia ex-Japan index and the MSCI All Country Asia ex-Japan Index NR: NR at the end of the benchmark name indicates the return is calculated including reinvesting net dividends. The dividend is reinvested after deduction of withholding tax, applying the withholding tax rate to non-resident individuals who do not benefit from double taxation treaties.

Net as at 30 November 2024

1 yr
%
3 yr
% pa
5 yr
% pa
7 yr
% pa
10 yr
% pa
15 yr
% pa
Since inception
(29/09/05) % pa
Total return 12.91 1.26 6.34 8.25 11.01 11.12 9.70
Growth 10.88 -0.02 4.03 4.91 6.99 7.91 5.19
Income 2.03 1.28 2.31 3.35 4.02 3.21 4.51

Growth return is the unit price movement on exit to exit basis. Income is expressed as Total Return less growth component.

Total net returns represent past performance only. Past performance is not a reliable indicator of future performance. Returns of the Fund can be volatile and in some periods may be negative. The return of capital is not guaranteed. Benchmark: MSCI AC Asia ex-Japan Index NR, effective 1 January 2010. Benchmark data prior to 1 January 2010 is a blend of the MSCI Asia ex-Japan index and the MSCI All Country Asia ex-Japan Index NR: NR at the end of the benchmark name indicates the return is calculated including reinvesting net dividends. The dividend is reinvested after deduction of withholding tax, applying the withholding tax rate to non-resident individuals who do not benefit from double taxation treaties.

DistributionDistribution (CPU)Reinvestment price
30-Jun-2443.8863$23.9765

CPU = cents per unit. The above cash CPU excludes imputation credits and foreign income tax offsets which are non-cash components and are reported in the end of year tax statement. If the Distribution CPU column is 0.0000 it means that nothing was distributed. 

Sectors and holdings

As at 31 October 2024

As at 31 October 2024

As at 31 October 2024

% total net assets
TAIWAN SEMICONDUCTOR MFG CO LTD 12.6%
HDFC BANK LTD 11.8%
FOCUS MEDIA INFORMATION TECHNOLOGY CO LTD 7.7%
TECHTRONIC INDUSTRIES CO LTD 7.4%
YUM CHINA HOLDINGS INC 5.9%
AIA GROUP LTD 5.9%
KWEICHOW MOUTAI CO LTD 4.5%
NAVER CORP 4.3%
GALAXY ENT GROUP LTD 3.4%
CP ALL PCL 3.2%

As at 31 October 2024

Fund % Benchmark % Relative %
HDFC BANK LTD 11.8 1.3 10.6
FOCUS MEDIA INFORMATION TECHNOLOGY CO LTD 7.7 0.0 7.7
TECHTRONIC INDUSTRIES CO LTD 7.4 0.3 7.1
YUM CHINA HOLDINGS INC 5.9 0.2 5.7
AIA GROUP LTD 5.9 1.3 4.6

As at 31 October 2024

Fund % Benchmark % Relative %
TENCENT HLDGS LTD 0.0 4.9 -4.9
SAMSUNG ELECTRONICS CO LTD 0.0 3.4 -3.4
ALIBABA GROUP HOLDING LTD 0.0 2.7 -2.7
MEITUAN 0.0 1.7 -1.7
RELIANCE INDUSTRIES LTD 0.0 1.4 -1.4

Fund ratings3

Organisation Rating
Lonsec Highly Recommended4
The Lonsec Report is only available to financial advisers, please contact us for a copy.
Morningstar  Silver5
Zenith Highly Recommended6

This Fund is unhedged and is subject to the risk of fluctuations in international stock markets and currencies. Investors accessing the Fund through a master trust or wrap account will also bear any fees charged by the operator of such master trust or wrap account. Any apparent discrepancies in the numbers are due to rounding.

1Management costs and buy/sell spread are current as at the date of publication of this website. These fees may be subject to change in the future. 

2Total returns (net) have been calculated using exit prices and take into account the applicable buy/sell spread and are net of Fidelity’s management costs, transactional and operational costs and assumes reinvestment of distributions. No allowance has been made for tax. Returns of more than one year are annualised. The return of capital is not guaranteed. 

3You should refer to respective research houses (and their disclaimers below) to obtain further information about the meaning of the rating and the rating scale. Ratings are only one factor to be taken into account when deciding whether to invest. Ratings are subject to change without notice and may not be regularly updated.  Ratings are current as at date (s) stated below. Fidelity pays a fee to some research houses for rating our funds.

4The Lonsec Rating (assigned February 2023) presented in this document is published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445. The Rating is limited to "General Advice" (as defined in the Corporations Act 2001 (Cth)) and based solely on consideration of the investment merits of the financial product(s). Past performance information is for illustrative purposes only and is not indicative of future performance. It is not a recommendation to purchase, sell or hold Fidelity International product(s), and you should seek independent financial advice before investing in this product(s). The Rating is subject to change without notice and Lonsec assumes no obligation to update the relevant document(s) following publication. Lonsec receives a fee from the Fund Manager for researching the product(s) using comprehensive and objective criteria.

5© 2021 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement (Australian products) or Investment Statement (New Zealand products) before making any decision to invest. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). Rating assigned December 2023. 

6The Zenith Investment Partners (“Zenith”) Australian Financial Services License No. 226872 rating (assigned October 2024) referred to in this document is limited to “General Advice” (as defined by the Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Zenith usually charges the product issuer, fund manager or a related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessment’s and  at  http://www.zenithpartners.com.au/RegulatoryGuidelines

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