Category Winner: Best Greater China Equity Fund - UBS (Lux) Equity Fund - China Opportunity (USD) P-acc
Inception Date: 1996-11-15
Total Net Assets (Mil) (2018-03-27): USD 5,174.40
Manager: Bin Shi, Projit Chatterjee, Derrick Sun
M: Morningstar U: UBS
M: Can you highlight any major changes you made to the portfolio over the course of 2017? Were there any particular holding(s) that drove the fund’s performance for the year?
U: Our strategy has remained consistent over the years. We strive to identify industry leaders and potential leaders amid changes in China's economic structure. In 2017, our stock selection in Financials and Consumer Discretionary added significant value. Core positions such as TAL Education and Ping An Insurance contributed strongly to our outperformance.
M: What is your outlook for 2018 specific to the markets you cover, and how are you positioned to take advantage of opportunities and/or mitigate potential risks?
U: Going into 2018, we were optimistic about prospects but didn't expect a repeat of the strong performance of 2017. At the start of 2017, valuations were low and increased through the year. We still see growth opportunities in the market and are prepared to take advantage with our bottom up stock selection approach.
Portfolio-wise, we increased our holdings in our high conviction ideas and maintained overweight positions in healthcare, IT, and consumer sectors. Fundamentals continue to look good and we expect that there is still ample room to grow.
M: Can you comment on the major risks facing financial markets, such as rising US rates and elevated asset prices? How do these risks affect your investment decisions?
U: Volatility is always there and we have seen higher levels in the past. We think that if the US is raising rates faster than market has expected this year, the market might react to that. In this environment, we believe that it's more important than ever to have a clear understanding of the companies we invest in.
M: How is your investment team organized? Have there been any changes to the investment team or structure over the past year? Do you anticipate adding to the team in the near future?
U: We have a core team of seven China specialists, along with the 7 regional analysts in the broader Asia ex Japan team. We haven't made major changes to the team during the past year, but we are adding a team member in Shanghai to add more expertise.
View all Morningstar Singapore Fund Awards 2018 articles here.