Milltrust ASEAN Fund Morningstar Rating

We are pleased to announce that the Milltrust ASEAN Fund has completed its 3 year track record and has earned a
5 star rating by Morningstar. Alan Tan has already earned a + rating by Citywire. The fund has outperformed its peer group where it ranks as number 1. Milltrust congratulates him and his team at Lion Global Investments for these remarkable achievements.

“3 Strong Themes for South East Asian Investments” says Alan Tan, PM of the Milltrust ASEAN Fund
04 Feb 2015 – Reported by Alexander Kalis, Managing Partner | Portfolio Manager & Head of Manager Research, Milltrust International

Following a difficult 2015 for South East Asian markets which underperformed the rest of Asia ex Japan, 2016 has started on a different footing where the region has generally outperformed the North Asian markets. The ASEAN region is a rather insular and very domestic-driven as demonstrated by its decoupling from global markets in the 2009 global financial crisis.

Growth will still be impacted however as a result of the low interest rate environment over the last few years that has spurred excessive domestic consumption and elevated household debt in places like Thailand and Malaysia especially to the highest in the region.

3 main investment themes have now emerged, explains Tan:

1) Indonesia – The prospect of regional interest rate cuts, particularly in Indonesia where the country has room to cut further as the real interest rate gap is the widest in the whole of Asia, should support investments in the country. Malaysia and Thailand are also expected to cut rates but for different reasons, in that they are in need to stimulate growth. This is especially the case for Malaysia, the only oil exporter in the region, where low oil prices are having a real impact on the economy. Interest rate cuts will provide relief to the indebted consumer in these countries.

2) Singapore – In view of a US tightening cycle likely to be pushed back somewhat in light of increased global economic challenges, this should act to play in favour of Singapore which is already trading at cheap valuations and offers the highest dividend yields in the region (4.5% on average). Banks are attractive plays offering compelling dividend yields and growth opportunities.

3) Infrastructure Spending – Infrastructure spending is more prominent in the more emerging ASEAN countries such as Thailand, Indonesia and the Philippines as they  need to do some counter-cyclical measures to stimulate the economy and their fiscal deficits are all below 3% which gives them the flexibility to act. This should bode well for some infrastructure plays.

Alan has been deploying cash in the last month which has reduced from 20% in 2015 to 8% today in light of the opportunities.

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