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HSBC Asia Ex-Japan Equity Smaller Companies Fund

2017-06-29, HSBC Asia ex-Japan Equity Smaller Companies fund, invests in smaller companies from Singapore to South Koreas, beat 97% of its peers over the past five years, with an annualised return of 17%, almost 5 times those of MSCI’s Asia ex-Japan Small Cap Index over the same period! The fund size is now $1.3 billion and had stop taking new money.

The fund manager is Elina Fung, formerly an auditor. The success attributed to:

  1. “In the small-cap space, the first thing that comes to investors’ minds is corporate governance.”
  2. You have to get on the ground. “If you don’t go there you would feel like you’re just investing based on what you understand on paper. You don’t get the sense of how it impacts people.”
  3. “Research is not just working on the numbers based on what the management tells you. You have to cross check with different channels and people in different parts of the supply chain to confirm your understanding of that trend or that company.”

Fung focuses on the bottom 25% of Asia ex-Japan equities by market cap. Fung first short-lists potential investments by valuation and other criteria. Then she scrutinizes the company’s fundamentals and sees how it sizes up versus some macro elements — like the economy and the sector the firm is active in.

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