The annual Morningstar Singapore Fund Awards are designed to help investors identify the retail funds and fund houses that added the most value for investors within the context of their relevant peer group in 2015 and over longer time periods.
To help our readers better observe what makes a winner fund, we asked the winning teams to shed lights on some major changes they made to the portfolio over the course of 2015, how various risks affect their investment decisions and their investment team structure, etc.
Best Singapore Equity Fund -- Schroder Singapore Trust A
Key Stats
Inception Date: 1 February, 1993
Morningstar Rating (as of 2016-02-29): 
Total Net Assets (Mil, as of 2016-02-29): 445.02 USD
Manager: Hooi Teoh Seok
Manager Start Date: 30 November, 2004
M: Morningstar S: Schroder Singapore Trust A management team
M: Could you highlight any major changes you made to the portfolio over the course of 2015? Were there any particular holding(s) that drove the fund’s performance for the year?
S: Over the course of the year, we added to mid-caps with more defensive earnings streams as well as companies with improving balance sheet profiles. Outperformance was driven by positive stock selection within the Transport sector, REITs and real estate developers, and an underweight in capital goods. By stock, contributors included overweighting of Mapletree Industrial Trust and SATS.
M: What is your outlook for 2016 specific to the markets you cover and how are you positioned to take advantage of opportunities and/or mitigate potential risks? Can you comment on the macro risks facing the global economy, including the US rate hikes, weaknesses in commodity prices and the significant headwinds facing the emerging world? How do these risks affect your investment decisions?
S: Two global factors are at work – one is growing dependency on monetary tools to drive macro stimulus instead of fiscal policy. In a number of large economic blocs, these monetary tools are increasingly unconventional and pose longer-term questions regarding liquidity creation and risk free rates. The other is the growing recognition that earnings growth will be difficult to eke out in spite of these efforts.
These two forces could lead to an initial relief phase for markets, with a boost from negative interest rates and “QE”, and subsequently, a re-assessment if conditions remain difficult and growth fails to materialize. The interplay of these forces is particularly relevant for Singapore equities. External currency and interest rate policy decisions have material impact on the Singapore dollar and local interest rates, and on perceptions of macro trajectory for this global growth dependent market. Under such conditions, a more tactical approach to sector positioning would be appropriate. Furthermore, new technologies and business platforms are improving connectivity and price discovery. These pose added challenges for incumbents in many sectors.
M: How is your investment team organized? Have there been or do you anticipate any changes to the investment team or structure over the course of the year? Do you anticipate adding to the team in the near future?
S: We have 2 country analysts that focus on wholly on Singapore companies. Complementing their efforts are regional sector analysts that cover Singapore banks and Singapore-listed agricultural commodities. In addition, we have 2 other analysts that cover a number of Singapore companies for other strategies -- for Asian Small Cap and covering a large pan-Asian conglomerate with regional listed entities. In total, we have 6 analysts researching Singapore-listed equities.
No changes to team or structure. However, we regularly review and refine stock coverage and the investible universe.
M: Can you highlight any areas where you feel that the investment team or the investment process can be improved upon?
S: We have been focussed on new ways of using data analytics to enhance perspectives on industry trends and tail risks. These will better help calibrate the impact on corporate earnings in a world of unconventional monetary policy, evolutionary advances in connectivity and virtualisation driving significant changes to business models.
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