Market participants in Asia-Pacific tend to be short-term oriented, causing stocks to firmly over- or undershoot fair value. This offers plenty of opportunities to buy at underpriced levels and sell at extended levels. The investment team adheres to a contrarian investment approach and a long-term investment horizon. Our Asia-Pacific Equities strategy adopts a clear value style: though most investors invest in Asia for growth, historical return patterns of Asian portfolios confirm superior returns are generated by value styles.
Focusing on identifying value opportunities and avoiding overhyped growth stocks
Taking account of momentum by acknowledging the power of herd behavior
Adhering to a long-term horizon and avoiding short-term market distractions
The three steps of our stock selection:
First, multiple screening tools help to shrink the universe of about 2,400 stocks to a manageable level, filtering out the unattractive stocks.
Next, the investment team evaluates the remaining 400 stocks and earmarks the most interesting opportunities for further analysis.
In a third step, we assess stock attractiveness from all possible angles. On a monthly basis, approximately 10 new investment ideas undergo in-depth fundamental and valuation analysis, including the impact of material ESG factors on the business model and valuation assessment. Price momentum of the stocks in our universe can be very powerful. Investors' herd behavior often leads to the bidding up of stock prices far beyond fair value once a stock becomes a popular hold. Generally, we will start trimming the position once our target price is reached, but to benefit from price momentum, we will hold on to part of the exposure.
The Hong Kong and Shanghai-based Asia-Pacific Equities team was founded in 2007. The team is made up of seasoned investment professionals with diverse cultural backgrounds to provide an East-meets-West investment approach. The team is embedded in Robeco's broader Global Fundamental Equities group of more than 60 investment professionals. There is frequent collaboration with the global thematic, sustainability and quantitative research specialists who support portfolio managers in designing, implementing and maintaining forecasting models and risk management tools.
This fundamentally managed strategy is available for developed markets or for an all-country universe.
A more concentrated version of about 35 to 50 stocks is also available. This portfolio has a clear value style. Though most investors invest in Asia for growth, historical return patterns of Asian style portfolios confirm superior returns are generated by value styles. The sustainable version of this strategy has both a lower ESG risk profile and significantly better environmental footprint than the reference index.
This strategy promotes, among other characteristics, environmental and/or social characteristics, which can include exclusionary screening, ESG integration, ESG risk monitoring and active ownership. It is classified as Article 8 under the EU Sustainable Finance Disclosure Regulation.
Our Asia-Pacific Equities strategy integrates ESG factors into its investment process by analyzing the impact of the financially material ones on a company’s competitive position and value drivers. We believe that this enhances our ability to understand long-term risks and opportunities of a company. If ESG risks and opportunities are significant, the analysis could impact a stock’s fair value and the portfolio allocation decision. In addition to ESG integration, the strategy applies an exclusion policy and benefits from voting and engagement activities focused on specific themes such as climate change, aiming to improve a company’s sustainability profile.
This has been a core expertise for us for decades
Team has long-term experience and low turnover
Leaning towards stocks that are attractively priced relative to their fundamentals