Investment philosophy

We invest with an absolute as well as a relative return mindset to avoid being carried away by indiscriminate euphoria. By focusing on the potential downside as well as on the upside when making any investment decision, the risk to long-term client returns is significantly reduced. We are convinced that the way to achieve superior long-term returns is by applying an absolute return mindset to all investment decisions.

We are genuine bottom up stock selectors. We place strong emphasis on high quality proprietary research and direct contact with the companies in which we invest. The team’s reputation as long-term investors gives First State unparalleled access to managements of companies in the Asia Pacific (ex-Japan) region; the long-term framework we operate means there is no pressure on focusing on quarterly numbers. The team makes direct contact with company managements well over 750 times per year.

We are benchmark insensitive. While we are aware of the country, sector and major company weightings in the benchmark index, we do not apply minimum portfolio weightings in any country, sector or company.  We consider the benchmark index to be a poor representation of the investment opportunities available and do not believe that fund managers should be obliged to invest in a stockmarket or sector, size regardless, where they cannot find a company that meets our demanding stock selection criteria. 
 
Our investment style is inherently conservative, focusing on capital preservation as well as capital growth. Companies that we invest in typically exhibit lower levels of gearing, stronger cash flows and lower earnings volatility than the peer group.  We believe that this approach produces consistent long-term outperformance in Asia Pacific (ex-Japan) markets.