With a 50-year track record of investing in Asia Pacific markets, Invesco’s commitment to the region remains rock solid. Moreover, with so many quality mutual fund providers serving the Hong Kong market, Invesco was understandably delighted to be given, among all awards, a Best-in-Class award in the Retail Top 100 – Sector Equity Consumer Good & Services Category for the Global Leisure Fund and named Mutual Fund – Provider of the Year, Hong Kong.
As the name suggests, the Global Leisure Fund invests in companies involved in the design, production or distribution of leisure-related products, i.e. those that are purchased with consumers’ discretionary dollars.
Portfolio Managers, Ido Cohen and Juan Hartsfield, invest in a spread across a range of companies in sub-sectors as diverse as broadcasting, advertising, hotels, restaurants, Internet-related products and auto manufacturers. Ido Cohen explained how investment opportunities are identified within a relatively large global investment universe: “A bottom-up research process helps us narrow the field of stocks through the identification of attractive trends. Trends identified may be fundamental, valuation opportunities or catalysts for change.”
Cohen, Hartsfield and the team build detailed investment case for each company, which clearly outline the different drivers of that particular stock. Hartsfield added: “A variety of valuation techniques are utilized based on the enterprise in question, the industry in which the company operates, the stage of the business cycle, and other factors that best reflect a company’s value.”
Typically, the investment process favors companies with an attractive revenue growth profile, strong free cash flow growth and which are led by management teams that are good stewards of capital. The Fund aims to remain well diversified across multiple industries directly levered to consumer discretionary spending, while industry exposures are actively managed according to prevailing secular themes.
Evolution in Spending Habits
People’s spending patterns are changing rapidly; not just in Asia, but worldwide. Technology is changing our shopping habits, travel patterns, and how we consume media.
Cohen noted that one of the biggest shifts currently is towards online retail consumption. He said: “We think we are still quite early in this change in most of the world, including developed markets. There are still large parts of retail that are only just beginning to change, such as food, apparel, luxury items, furniture, appliances and auto.”
There have also been notable developments in the media sector, where consumption has shifted from traditional formats to internet protocol and mobile. According to Hartsfield: “This is driving significant changes in how content is packaged and is creating new network needs to meet these demands.”
The team also aims to exploit opportunities resulting from changing consumer preferences and demographics. Both managers were keen to point out that: “Healthier lifestyle choices, for example, are an increasing focus for more educated consumers. What’s more, large, developed markets like Japan and the US have large numbers of older age consumers, which we think is driving changing discretionary choices as well.”
“It is an attractive sector in which to invest, and we are honored to be recognized in the BENCHMARK Fund of the Year Awards 2016,” concluded Cohen.
Building Local Presence
Along with its existing operations in the US and Europe, Invesco has established a strong presence in Asia, with investment teams in Hong Kong, India, Japan, Singapore and Taiwan. Clarence Lee, Director, Head of Intermediary Sales, Hong Kong, believes this specialist fund management focus is important. “Fully understanding local market trends would be challenging if you are sitting in the US or UK, for example,” noted Lee. “With today’s technology, we can stay connected to some extent, but there’s no substitute for being on the ground to keep abreast of local and regional developments.” As well as its offices in the region, Invesco has a joint venture in China, Invesco Great Wall.
“We offer more than just scale. First and foremost, we have a pure focus on investment. It is the only thing we do – we are not a subsidiary of a banking organization or a subsidiary of an insurance group. I think that helps us focus on delivering a superior investment experience, without any outside pressures or distractions,” he continued.
Moreover, according to Lee, there are some significant advantages of being part of a global organization. “This enables us to provide local clients with a broad range of insights, trends and perspectives,” he said. In fact, that is only half the story; as well as enjoying the benefits of a large organization, Invesco values the importance of maintaining a strong local presence, incorporating both investment management expertise and first-class client support.
Working Closely with Clients
Notwithstanding technological advances and a steady stream of innovations in the industry, investment management primarily remains a people business. “To succeed you need to have superb client engagement, to be talking with customers on a daily basis,” noted Lee, “only then can you completely understand their needs and the everyday issues they are facing in their businesses.”
As well as an unwavering focus on clients, Invesco works hard to cultivate relationships within its own business.
Lee explains that at its heart, Invesco is a collaborative business, enabling new ideas to be shared and debated: “We embrace diversity of thought. Ideas can be exchanged freely, which I think is unique in such a large company. With this kind of culture, we can develop innovative investment solutions that our clients are looking for.”
Breaking New Ground
Currently, outcome-oriented solutions are among the key focus areas for the firm’s product development teams. Over the past couple of years, Invesco has seen an increasing trend towards these types of vehicles and is working to provide bespoke solutions to meet the unique requirements of individual investors. Therefore, Invesco is increasingly turning its attention to how it can better help its investors achieve their increasingly complex investment goals. Lee also notes the investors’ increasing attention towards factor investing.
“In a study, we conducted late last year, we found that 71% of institutional investors, private banks and consultants surveyed in Asia, North America and Europe expect to increase their allocations to factor products. In fact, overall assets under management in this space are expected to double over the next five years,” noted Lee.
Since the Global Financial Crisis, investment objectives for many clients have evolved, and increasing numbers are seeking a better understanding of their risk and return profile. With this in mind, Invesco is committed to developing factor products and other solutions that can help clients navigate the market volatility that appears likely to persist.
The intention is that, over time, some of this new product development initiatives will complement Invesco’s existing suite of investment products. BM
景順在亞太市場屹立半個世紀，擁有輝煌的投資往績，而且對亞太區的投入始終如一、堅定不移。景順在香港市場云云的優質互惠基金供應商之中脫穎而出，其「消閒基金」榮獲「《指標》年度基金大獎 – 行業股票消費品及服務」類別，同級最佳，並勇奪「《指標》年度基金大獎 – 供應商（互惠基金）」的殊榮。顧名思義，景順的消閒基金投資的企業業務涉及設計、生產或分銷消閒相關產品（即消費者餘裕金錢購買的奢侈消費品）。該基金投資組合經理Ido Cohen和Juan Hartsfield所投資的公司業務相當廣泛，涉及廣播、廣告、酒店、餐飲、互聯網相關產品及汽車製造商等分支行業。Ido Cohen解釋如何在相對較大的環球投資領域中物色投資機會：「團隊採用自下而上的研究過程，透過確定具吸引力的趨勢，收窄選股範圍。所確定的趨勢可以是公司的基本因素、估值機會，或者是改變的因素。」