Bottom line: plunge into Asia

Asia is the place to invest, says Dr Shane Oliver, AMP Capital’s chief economist. “Asian shares are likely to be relative outperformers over the next few years, helped by high savings rates in a world of deleveraging, reasonable valuations and relatively strong growth prospects,” he says.

If you are confident that Asia is a powerhouse of returns, take a look at AMP’s new Future Directions Asian Share Fund. The multi-manager fund was launched late last year and is one of the seven new Asian ex (excluding) Japan funds unveiled in 2008.

The risk rating is high and the investment horizon is seven to 10 years. One attraction is that you can invest with as little as $1500. AMP Capital, with the assistance of an asset consultant to big superannuation funds, Mercer Investment Consulting, has picked three “best of breed” boutique fund managers specialising in Asia: Treasury Asia (25 percent of the portfolio), MIR (35 percent) and Rexiter (40 percent).

All three have experienced managers with different but complementary investment styles. Treasury Asia is a stock picker while MIR is a quantitative manager and Rexiter focuses on quality companies trading at good value, making it an attractive core holding in the portfolio. Rexitor is also well known for its experience in managing Korean government funds and corporate reconstructions in Asia.

The Future Directions Share fund invests 98 percent of the fund in Asian shares and it aims to outperform the benchmark, the MSCI All Country (AC) Asia ex-Japan Index.

The fund charges an investment management fee of 2.7 percent, higher than the average retail fee of 2.09 percent for emerging market funds, and 1.24% for wholesale emerging market funds. Multi-manager funds are typically more expensive than single managers.

MONEY VERDICT
Investing in Asian shares is not for the faint-hearted because of the extreme volatility. If your time horizon is seven to 10 years and you believe Asia will outperform other markets, this is a fund with an attractive low minimum entry of $1500.

For more on investments, see this month’s Money

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