Asia ex-Japan Equity
Paying the right price relative to quality
Reasons to invest
Price-to-quality
Contrarian
Asymmetric payoff
ESG integration
Track record
Strategy overview
We seek an asymmetric return profile, and pay particular attention to the risk of downside in absolute terms
Why Asia ex-Japan Equity?
We are contrarian investors. Often the stocks we buy are attractively priced because news flow has recently been negative and the stocks have underperformed. We stand alone in terms of style versus our top 10 peers by assets under management. As a result, we have a very low correlation with the rest of the fund market.2
2Source: Morningstar, data as of end of June 2021 due to 3 months lag on holdings disclosure. Coloured dots represent styles of peers as determined by Morningstar. Peer group selected based on top 10 AUM funds in the Asia ex-Japan Morningstar category.
We aim to invest so that the upside/downside of a position is asymmetric: the upside far outweighing the potential downside. Our larger positions tend to be those with lower risk – we define risk as the permanent loss of capital rather than volatility or divergence from the benchmark.
How we invest
Investment philosophy
We believe alpha can best be generated by bottom-up analysis: buying companies that are attractively priced relative to their quality.
Investment process
We apply a liquidity and size screen, and filter for companies trading cheaper than expected relative to their quality, reducing the universe of 18,000 stocks down to around 250.
We study financial statements, write reports and project financials. We hold discussions with management, and incorporate ESG analysis. This process filters down our investable companies to circa 100 stocks.
We select 45-60 mispriced stocks, sizing the positions by considering risk. We have an 18-24-month average holding period. We sell when a stock reaches its intrinsic value, our assessment changes or we find a better idea.
Team
Jonathan Pines, CFA
Co-portfolio manager
Sandy Pei, CFA
Co-portfolio manager
Product Information
For the latest performance and vital information – including prices, key facts, identifiers and ratings
Our Purpose
To deliver Sustainable Wealth Creation
Like all our investment capabilities, Federated Hermes Asia ex-Japan Equity aims to deliver Sustainable Wealth Creation: the generation of wealth through investments that enrich investors, society and the environment over the long term.
Our business provides three equally powerful pathways to achieving this aim. Federated Hermes Asia ex-Japan Equity features in the Active ESG route.
Responsible, active investing for long-term performance.
- Financial objective
- Best-practice integration of ESG analysis and engagement insights
- Some capabilities may enforce exclusions that reflect Portfolio Managers’ investment views
- Delivery of sustainable outcomes through effective stewardship
Asia ex-Japan Equity
Thematic and values-based approaches for sustainable outcomes.
- Financial and sustainability objectives
- Best-practice integration of ESG analysis and engagement insights
- Exposure to sustainability themes
- Exposure to ESG leaders and industry exclusions that reflect sustainability values
- Delivery of sustainable outcomes through effective stewardship
Mission-led investment strategies to create positive impact.
- Financial and impact objectives
- Best-practice integration of ESG analysis and engagement insights
- Focus on companies generating impact or undergoing positive transformation
- Some capabilities may enforce exclusions that reflect defined sustainability values, impact considerations, or both
- Delivery of sustainable outcomes through effective stewardship
