Unconstrained approach vital to returns as Asian funds top sectors over 5 years

Stock selection has been the key to outperformance for funds in the Asia Pacific excluding Japan sector over the last five years.

The region had the best returns of any IMA sector during that period at 90.2%, according to Morningstar. However, over three years and one year, also to 21 January, the sector was surpassed as growth picked up steam in the Western economies. Those Asia Pacific managers who were free to invest where they saw the best opportunities, rather than being constrained to follow a benchmark’s weightings, performed better in a challenging environment, which included the global economic downturn of 2008. They were also able to underweight the export-driven economies of China, Taiwan and Korea wh...