With the rise of a newly emerging middle-class and improving corporate governance, Asia Pacific presents attractive investment opportunity set for investors.
Dominant consumer franchises
With favourable demographics and populations that are still growing – particularly in Southeast Asia and India – we believe dominant consumer franchises can offer good growth potential over the long term.
Rise in healthcare spending
Many countries are under-invested in healthcare compared to the global average. As these economies become richer, we expect healthcare and health-related spending to rise.
High quality financials
We believe banks and high quality financials should benefit from similar drivers as consumer businesses: demographics, rising incomes and urbanisation.
A more connected and automated world
As the world embraces a digital future, we believe Asian technology firms should benefit from strong end demand and a growing market. At the same time, lower-cost robots allows manufacturers to automate their processes.
About the strategy
Home to 60% of the world’s population, Asia Pacific is well positioned to benefit from opportunities driven by the rise of digital innovation and favourable demographics.
Alistair Thompson and Richard Jones, Directors, explain the investment philosophy behind the Asia Pacific investment strategy.
About the stratgy - Asia Pacific
Our investment philosophy
FSSA Investment Managers’ investment approach is centred on identifying quality companies, buying them at a sensible price and holding for the long term.
We look for founders and management teams that act with integrity and risk awareness; and dominant franchises that have the ability to deliver sustainable and predictable returns over the long term.
We are research-driven, bottom-up investors1, carrying out detailed fundamental analysis2 to identify high quality companies to invest in for the long term. We travel extensively to meet with companies to assess the quality of management and their track record of executing long-term strategies; and supplement this with a qualitative and quantitative analysis of the company’s ability to compound growth in excess of the cost of capital.
1. Bottom-up investing is an investment approach that focuses on the analysis of individual stocks and de-emphasizes the significance of macroeconomic cycles.
2. Fundamental analysis is a method of measuring a security's intrinsic value by examining related economic and financial factors.
Our approach to sustainability
Environmental, social and governance (ESG) analysis is fully integrated into our investment process.
Our approach to responsible investing has been shaped by an emphasis on stewardship and the belief that quality managers and good governance should ensure that environmental and social concerns are rightfully addressed.
To us, sustainability is not just a label, but a set of values by which we operate.
As a firm, we have been signatories to the Principles of Responsible Investment (PRI) since 2007 (we view it as a minimum standard) and are constantly striving to better understand how ESG and sustainability issues impact long-term investment performance.
Case study: Stewardship
FSSA Investment Managers has invested in DBS Bank since 2010, engaging regularly with DBS management during that time. This approach allows us to build trusted, long-term relationships with the companies we allocate our clients' capital to.
DBS asked FSSA Investment Managers to review and suggest improvements to their Sustainability Report. In our feedback, we reinforced the importance of good quality reporting and improvements including a report that articulated the Bank's sustainability strategy; explanation of the Bank's initiatives and how they align with the United Nations' Sustainable Development Goals; and improved disclosures on financing projects which may, on the surface, seem to fall short of DBS' commitment to the Sustainable Development Goals.
We believe that this would add to the DBS' credibility on sustainability issues; and made clear that any disclosures they made would be used for internal research purposes, to help us assess the quality of the DBS franchise and the risks associated with various environmental, social and governance challenges.
Disclaimer: Reference to specific securities (if any) is included for the purpose of illustration only and should not be construed as a recommendation to buy or sell the same. All securities mentioned herein may or may not form part of the holdings of FSSA Investment Managers' portfolios at a certain point in time, and the holdings may change over time.
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