JOM SILKKITIE ASIA EQUITY INVESTMENT FUND Monthly Report January 2019

Transcription

1 JOM SILKKITIE ASIA EQUITY INVESTMENT FUND Monthly Report January 2019 JOM Silkkitie Asia Equity Investment Fund s NAV was at the end of January, so the performance during the month stood at +1.56%. Since fund inception (31st July 2009) the NAV has increased by %, thus the annual performance has been +8.78%. In January, the stock markets all over the world began to recover from the downward correction of Q The tide was turned at least partly due to the reassuring remarks of Fed s Powell, as he indicated the rate hikes and QT (quantitative tightening) may be implemented in a more modest manner than previously thought. Especially the Asian stock markets have ample room for recovery, as they were pushed down to very low valuation levels amidst the concerns plaguing Such were namely the trade war issues, central banks monetary policies (affecting liquidity), and the slowing down of the world economy. The best performing Asian stock markets in January were China, Thailand, The Philippines and Indonesia, whereas the markets in India, Taiwan and Vietnam were moving sideways or downwards. JOM SILKKITIE, NET ASSET VALUE (31 January 2019) Fund size meur Number of fund units Inception date Last month s performance +1.56% Performance since inception % Annualized performance since inception +8.78% Accumulated management fee* 0.10% Accumulated performance fee* 0.00% Accumulated custodian fee* 0.01% Net investment position (prior to subscriptions on ) 91.2% Volatility** 14.8% Portfolio turnover 239.7% There was also a clear distinction between the large index stocks that had previously been performing well ( ETF theme ), and the small and midcap stocks. Going forward, we believe the market movements will mainly be defined by the central banks monetary policies, and only secondarily the trade war related issues. We closed our US index related hedge positions due to Powell s comments in January. Indonesia s and China s weights increased slightly last month, whereas those of Pakistan and India decreased. In respons to a disappointing report, we sold off the entire holdings in the Vietnamese construction company Cotec, which decision was further supported by the company s somewhat blurry outlook as the construction cycle is now likely to slow down a bit. Name: JOM Silkkitie Fund (UCITS) Portfolio Manager: Juuso Mykkänen Custodian: SEB. Helsinki branch Benchmark index: No official index Profit sharing: The Fund has only accumulating units Fund rules last confirmed: OVERVIEW OF THE FUND Inception date: ISIN-code: FI Bloomberg-ticker: JOMSILK FH Fund target group: Demanding investors who understand the potential of Asian equity markets in the long run. Minimum subscription: Subscription account: IBAN: FI BIC: ESSEFIHXXXX Management fee: 1.2% p.a. Subscription fee: 1.5% - 0% Redemption fee: 1% (min. 20 ) Performance fee: 10% on the return exceeding the hurdle rate of 5%. (pls see Fund prospectus for details) Pastperformanceis no guaranteeforfuturereturns.the Fundvalue mayincrease or decrease, andtheinvestor mayincurlosses whenredeeming his shares. MSCI AC Asia ex-japan (EUR) is a price index, which takes dividends into account. Further details on JOM Silkkitie Investment Fund may be foundin thekeyinvestorinformation document,fundprospectus andfundrules,which areavailable by requestfromjom Fund ManagementLtd, or on the website *For the fiscal period since , % of fund average net assets. **Based on daily returns during 12 months. Detailed formulasavailablefromthefundmanagement Company.

2 JOM SILKKITIE ASIA EQUITY INVESTMENT FUND Monthly Report January 2019 Jakarta Composite Index JCI Equities by Investment Themes Financial & Property 24 % FUND CORRELATION (12M, DAILY) WITH SOME EQUITY INDICES (EUR) Philippine composite Index PCOMP Infra 19 % HK China H shares HSCEI Green & Clean 4 % Consumers 53 % MSCI Asia ex-japan Topix MSCI World S&P 500 Bloomberg Europe 500 Index Indonesia Philippines China Asia Japan World US Europe FUND PERFORMANCE MONTHLY (%) Equities Geographical Break-down Myanmar 3 % Pakistan 3 % Vietnam 13 % India 9 % Philippines 16 % China 29 % Indonesia 27 % Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year JOM SILKKITIE NAV VS. THE REGIONAL EQUITY MARKET INDEX % + 40 % % % + 20 % % + 0 % -20 % FUND PERFORMANCE BI-ANNUALLY (%) % % MSCI AC Asia ex-japan (Total return, EUR) JOM Silkkitie % % % % % % % % % % % % % % % Pastperformanceis no guaranteeforfuturereturns.the Fundvalue mayincrease or decrease, andtheinvestor mayincurlosses whenredeeming his shares. MSCIACAsiaex-Japan (EUR) isapriceindex, whichtakes dividendsintoaccount. FurtherdetailsonJOM SilkkitieAsiaEquity InvestmentFund maybe foundin thekeyinvestorinformationdocument,fundprospectusandfundrules,whichareavailableby requestfromjomfundmanagement Ltd,or onthewebsitewww.jom.fi.

3 Vietnam JOM SILKKITIE ASIA EQUITY INVESTMENT FUND Vietnam s equity market has been of late rather quiet despite the fact that the country s GDP has been growing at the fastest clip in Asia, and Vietnam should benefit the most from the trade war between the US and China. We think the muted action is due to the following factors: Monthly Report January 2019 JOM Silkkitie fund s Vietam weight is currently 14% and it consist of 4 domestic driven companies, that have posted decent results for A leading car-dealerhip Savico posted 110% growth in net income for 2018, while country s largest jewelery company Phu Nhuan Jewelry posted 30% in net income respectively. Vietnam is seen globally and in Asia as an illiquid Frontier market, and many large institutional investors refrain from allocating new capital amid ongoing trade war and a slowing global trade cycle. Capital market opening process is currently rather muted and some concrete steps forward are needed in order to increase market liquidity and openness. Investors are waiting expecially for improvements on FOL (foreign ownership limits) and day trading activity, which may take some steps ahead before Global mobile phone cycle has slowed down especially within high-end products (Samsung, Apple). As Samsung has largely focused on Vietnam during the last 6 years (Samsung s share of FDI is some 20% annually), some people may view Samsung now as a risk to Vietnam as a large part of its products are manufactured there. Vietnam s export to GDP ratio is over 100%, being one of the largest in Asia. Therefore, as the global trade cycle is slowing, many view Vietnam as a vulnerable market to invest in. Looking at the bigger picture, we think that Vietnam is clearly one of the brightest stars in Asia. Country has managed to attract substantial FDI investments both from Asia and globally due to improving infrastructure and logistics chains, not to mention low labor costs. Vietnam is not suffering from current account deficit, thus VND s peg to USD is not at risk currently. The political situation has also remained stable. However, the true potential of Vietnam lies in its +90m population, which is young and vibrant demographic dividend is a long term growth factor for the country. Therefore we believe that Vietnam s stock market is the main beneficiary when the global cycle turns and liquidity improves. Also a resolution to the trade war could be a strong near-term factor to improve investor sentiment in Vietnam. Above: As US stocks are now at 70 year peak over global equities, it is highly likely that investors interest over EM and global equities will rise.

4 JOM KOMODO INDONESIA EQUITY INVESTMENT FUND Monthly Report January 2019 JOM Komodo Indonesia Equity Investment Fund s NAV was at the end of January, as it increased by % during the month. Since fund inception (15 th May 2012) the NAV has increased by %, thus the annual performance has been +7.99%. Foreign investment money started to flow into the Indonesian capital markets stocks and bonds alike which was definately a long awaited and remarkably positive turn, as the foreign capital had been continuously flowing out of the country since May Many market analysts see now Indonesia as one of the top most interesting countries to invest in Asia, because 1. the trade war is rather seen as a positive thing for the country; 2. the political situation is is stable as the environment is very much pro Jokowi ahead of the presidential election; 3. Indonesia is not vulnerable to changes in the global economic cycle, as the country s economic drivers are mainly domestic and structural, and 4. the state finances have been conservatively managed and overreactions to both directions have been avoided. In January we increased the weights of such consumer stocks, which have dropped to lowest valuation levels in many years, and where we expect to see improving profits due to e.g. strengthening of the country s currency IDR. Following a similar reasoning we correspondingly modestly decreased the weight of banking sector stocks. Equities by Investment Themes Basic Materials, 10 % Consumer, Cyclical, 27 % Communicat ions, 1 % Energy, 3 % Consumer, Noncyclical, 6 % Technology, 2 % Financial, 24 % Industrial, 27 % JOM KOMODO, NET ASSET VALUE (31 January 2019) Size of the fund meur Number of fund units Inception date Last month s performance +6.46% Performance since inception % Annualised performance since inception +7.99% Accumulated management fee* 0.13% Accumulated performance fee* 0.00% Accumulated custodian fee* 0.02% Net investment position (prior to subscriptions on ) 98.3% Volatility** 16.6% Portfolio turnover 176.7% Fund s correlation to JCI-Index (12m) 0.72 Name: JOM Komodo Fund (UCITS) Portfolio Manager: Juuso Mykkänen Custodian: SEB. Helsinki branch Benchmark index: No official index Profit sharing: The Fund has only accumulating units Fund rules last confirmed: FUND OVERVIEW Inception date: ISIN-code: FI Fund target group: Demanding investors who understand the potential of Asian equity markets in the long run. Minimum subscription: Subscription account: IBAN: FI BIC: ESSEFIHXXX Management fee: 1.5% p.a. Subscription fee: 1.5% - 0% Redemption fee: 2% (min. 20 ) Performance fee: 10% on the return exceeding the hurdle rate of 5%. (pls see Fund prospectus for details) Past performance is no guarantee for future returns. The Fund value may increase or decrease, and the investor may incur losses when redeeming his shares. Jakarta Composite Index (EUR) and MV Indonesia SmallCap Index (EUR) are price indices, which take dividends into account. Further details on JOM Komodo Investment Fund may be found in the key investor information document, fund prospectus and fund rules, which areavailable by request from JOM Fund Management Ltd, or on the website *For the fiscal period since , % of fund average netassets. **Will be calculated based on daily returns during 12 months. after the fund has sufficient track history. Detailed formulas availablefrom the Fund Management Company.

5 JOM KOMODO INDONESIA EQUITY INVESTMENT FUND Monthly Report January 2019 FUND PERFORMANCE MONTHLY (%) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year Above: Both household and corporate leverage to GDP are very low in Indonesia. Below: Also public debt to GDP is at low levels. Thus, Indonesia s total leverage level is below 100% to GDP, that is a very rare combination. Source: CLSA JOM KOMODO NAV VS. INDONESIA EQUITY INDICES JAKARTA COMPOSITE Index (EUR) S&P Indonesia SmallCap Price (EUR) JOM Komodo Past performance is no guarantee for future returns. The Fund value may increase or decrease, and the investor may incur losses when redeeming his shares. Jakarta Composite Index (EUR) and MV Indonesia SmallCap Index (EUR) are price indices, which take dividends into account. Further details on JOM Komodo Investment Fund may be found in the key investor information document, fund prospectus and fund rules, which areavailable by request from JOM Fund Management Ltd, or on the website *For the fiscal period since , % of fund average netassets. **Will be calculated based on daily returns during 12 months. after the fund has sufficient track history. Detailed formulas availablefrom the Fund Management Company.