SE Asian fund managers expect delayed recovery-S&P

SE Asian fund managers expect delayed recovery-S&P

Reuters
Hong Kong

Funds investing in Southeast Asian markets expect a delayed
regional recovery and have adopted a defensive posture, reining
in sector and stock bets against benchmarks, Standard & Poor's
said on Tuesday.

"However it is not all gloom, some managers view recent
depressed levels as a highly attractive buying opportunity,"
S&P's said in a report on Southeast Asian fund performances.

S&P's said Southeast Asian markets have been disappointing
performers in recent years but their volatility has provided
opportunities for rewarding investment.

"The challenge for investors is fund selection," Linda-Jane
Coffin, director and head of S&P's Asian team, said in a
statement.

S&P's said although most fund managers have not been able to
buck the declining trend in prices, they have mitigated the
market setback.

The MSCI All Countries Far East Free ex-Japan index fell
nearly 50 percent in U.S. dollar terms during the past five
years, but median performances for offshore funds investing in
the region tracked by S&P's posted smaller falls of some four
percentage points.

S&P's, in its report covering 23 locally-managed funds and 16
offshore funds covering the year up to September 1, noted a wide
dispersion in such performances, due to diverse ways in which the
funds are managed.

"A variety of different benchmarks are used which result in a
wide range of portfolio constructions," it said.

Some portfolios, for example, had held as much as 40 percent
cash during the height of the Asian crisis three years ago.

But in the 12 months to Sept.1, cash had typically not
exceeded 10 percent of fund managers' portfolios.

S&P's rated the fund performances stable across the board.

"This trend reflects the more cautious and index neutral
stance taken by fund managers," S&P's said.