Investment fund Jupiter Asian Income will be three years old this weekend. Although the past is no guarantee of the future, the fund has got off to a solid start with overall investor returns touching nearly 45 per cent.
It is a record which manager Jason Pidcock is justifiably proud of, but he will not be relaxing. Far from it.
His diary is jam- packed full of meetings with the management of companies whose shares the fund holds – the likes of investment bank Macquarie, gaming company Star Entertainment and mining giant BHP Billiton (all Australian owned).
Some of the region’s more embryonic economies, he believes, are too risky on both an economic and political level. For example, he currently has no exposure to Bangladesh, Indonesia, India, Pakistan or Thailand.
Gaming is a strong theme in the fund’s portfolio as reflected in key holdings Sands China (the fund’s biggest stake), Genting Singapore and Star Entertainment.
Pidcock adds: ‘Sands China is one of only six licensed casino operators in Macau, China’s official gambling destination and now known as the Las Vegas of Asia. Sands has the most casino space in Macau and some 13,000 hotel rooms. Over the Chinese New Year, you can’t get a room for love nor money.’
With China’s emerging middle- class prepared to spend more of their disposable income on entertainment, Pidcock believes Sands will be a big beneficiary. ‘It’s a good company,’ he adds, with a five per cent dividend yield and the potential for dividend growth.
As for the future, Pidcock sees only two potential blips upsetting the investment applecart – socialism and climate change.
He believes that if ‘full bloodied’ socialism takes grip in the United States – fuelled by Democrats keen on state intervention and wealth taxes – it will prove a ‘massive’ headwind for both US and global equities. He is also fearful of the devastating impact climate change could have on some of the ‘emerging’ economies within Asia.
Jupiter Asian Income is prudently managed and provides an attractive income, paid quarterly. The annual ongoing charge is not too onerous at 0.98 per cent and the fund provides important diversification – and protection against a falling pound.
It is among Hargreaves Lansdown’s top ‘wealth 50’ investment funds, with the wealth manager liking both Pidcock’s pragmatic investment approach and a track record of investing in Asia going back 26 years. It should represent no more than five per cent of a well-diversified investment portfolio.