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PineBridge Asia Ex Japan Equity Fund: All Active, All Caps, All Seasons
Caroline Loke
Portfolio Manager
To gain meaningful access to Asian equities, global investors may want to consider a benchmark-unconstrained investment approach with access to the full spectrum of the market –seeking mispricing opportunities wherever they may arise. The PineBridge Asia ex Japan Equity Fund, an actively managed all-cap strategy, offers investors a compelling way to harness the region’s potential.
Powered by a time-tested investment process
For over 20 years, we have honed our proprietary Lifecycle Categorization Research (LCR) framework to identify stock level market inefficiency by anticipating the gradual change in companies over their lifecycle. Driven by bottom-up fundamental research, our approach is independent of style, company size, sector, country allocations, or index weighting, resulting in a high-conviction portfolio markedly different from the benchmark.
Lifecycle Categorization Research Framework Categorizes Companies Based on Where They Are in Their Lifecycle
The LCR framework works in tandem with our proprietary 77-point analytical Equity Risk Assessment (ERA) framework which incorporates environmental, social, and governance (ESG) analysis as intrinsic to the investment process. In addition, our “consultivist” approach to engaging with companies helps drive improvement in governance quality and business sustainability to create value for all stakeholders.
ESG Analysis Is Incorporated into Our Equity Risk Assessment Framework
Source: PineBridge Investments, as of 25 February 2021. For illustrative purposes only. We are not soliciting or recommending any action based on this material. Any views represent the opinion of the Investment Manager, are valid as of the date indicated, and are subject to change.
Designed to deliver excess returns over its benchmark at a similar level of total risk
The Fund seeks to deliver returns above the benchmark while keeping total risk at about the same level as the benchmark. An unbiased high-conviction and active stock selection offers investors a flexible capital allocation framework and better potential to outperform over the long run.
The PineBridge Asia ex Japan Equity Fund outperformed the benchmark (bid to bid) in one-, three-, and five--year periods and ranked in the first quartile against peers in one- and three-year periods.1
Competitive Returns With Similar Risk to the Benchmark
Past performance is not indicative of future results. As of 31 January 2020. Reflects the net performance of the PineBridge Asia ex Japan Equity Fund (the “Fund”), which is a sub-fund of PineBridge Global Funds, an Irish domiciled UCITS umbrella fund, authorised and regulated by the Central Bank of Ireland. The bid-to-bid performance is calculated net of fees on NAV to NAV in USD with dividends reinvested. Offer-to-bid performance takes into account the maximum 5% sales charges. Returns over one year are annualized. Performance is representative of Y class in USD. The Fund was formed as a successor fund to AIG South East Asia Fund plc (the “Company”) following a scheme of amalgamation with the Company and was launched on 29 July 2005. PineBridge Investments Asia Limited, authorised and regulated by the Securities and Futures Commission in Hong Kong, is the Investment Manager to the Fund and also acted in this capacity for the Company. The inception date of Class “Y” of the Company was 26 July 1991 and the launch date of Class “Y” of the Fund, 29 July 2005. All investments involve risks, including loss of principal. We are not soliciting or recommending any action based on this material. *The benchmark was changed to the MSCI All Country Asia ex Japan Daily Total Return Net Index from 1 December 2011. From inception to 30 November 2011, the benchmark was the MSCI All Country Far East Ex-Japan DTR Net Index. Benchmarks are used for illustrative purposes only, and any such references should not be understood to mean there would necessarily be a correlation between investment returns of any investment and any benchmark. An investor generally cannot invest in a benchmark, and any referenced benchmark does not reflect fees and expenses associated with the active management of any investment. See Endnotes.
Volatility
Source: Bloomberg, PineBridge Investment as of 31 December 2020. Calculated based on rolling one-year period. Volatility is measured by standard deviation, which is the basic measure of the fund risk, i.e. the volatility of the fund’s returns in relation to its average. The higher the standard deviation, the more volatile is the fund’s returns. For illustrative purposes only. We are not soliciting or recommending any action based on this material. Past performance is not indicative of future results.
Designed to capture the most compelling opportunities without benchmark constraints
An all active, all-cap strategy is tailored to capture stock-level market inefficiencies across the full depth and breadth of the Asian equity market independent of market regimes, company type or size. Affirming our philosophy, our portfolio of 40 to 70 stocks aims to maintain an active share exceeding 75%.2
The Fund’s Top 10 Holdings Are Highly Differentiated From the Benchmark
As of 31 December 2020. Top 10 holdings calculated including cash holdings. Source for Characteristics: FactSet. *The benchmark is MSCI All Country Asia ex Japan Daily Total Return Net Index. For complete benchmark history, please see the Fund Endnotes. Benchmarks are used for illustrative purposes only, and any such references should not be understood to mean there would necessarily be a correlation between investment returns of any investment and any benchmark. An investor generally cannot invest in a benchmark, and any referenced benchmark does not reflect fees and expenses associated with the active management of any investment. We are not soliciting or recommending any action based on this material. Any references to specific securities are for illustrative purposes and are not to be considered recommendations or a representation of all of the securities purchased, sold or recommended for the portfolio. It should not be assumed that investments in any such specific securities were or will be profitable. There can be no assurance that any of the above allocations or holdings will remain in the Fund at the time this information is presented. A complete list of holdings is available upon request. Diversification does not necessarily ensure against market loss. Past performance is not indicative of future results.
Market Cap Distribution Shows a Diversified Portfolio
Source: PineBridge Investments, as of 31 December 2020. For illustrative purposes only. We are not soliciting or recommending any action based on this material. Weighted average market cap is calculated by weighting each component company according to the size of its total market capitalization. Market capitalization is calculated by multiplying the total number of a company's outstanding shares by the current market price of one share.
Backed by an experienced team with a local presence and global resources
PineBridge has a long history managing Asian equity strategies, with our earliest strategy launched in the early 1990s. Our Asia ex Japan Equity team consists of 24 investment professionals situated across the region. The team’s enviable reach in the region positions us to capture shifts and emerging trends from the ground up, with approximately 2,000 direct company contacts every year.3 These on-the-ground inputs are combined with global industry perspectives from across the firm through regular structured collaboration, underpinning a robust process of stock selection.
As Asia’s growth trajectory continues to diverge from the rest of the world, we think it’s time for investors to consider the benefits of an actively managed strategy that’s as forward-looking as the region. The PineBridge Asia ex Japan Equity Fund, backed by our team of on-the-ground specialists, offers investors the skill and experience needed to navigate dynamic markets and deliver sustained return potential.
Footnotes
1 Morningstar as of 31 December 2020. Fund performance is reflective of Share Class Y USD. Performance is net of fund total expense ratio. Peer performance refers to the average of all the funds in Morningstar’s Asia ex Japan Equity category. Third-party rankings from rating publications are no guarantee of future investment success. Working with a highly rated advisor does not ensure that a client or prospective client will experience a higher level of performance or results. 2 Source: FactSet as of December 2020. For illustrative purposes only. We are not soliciting or recommending any action based on this material. Active share measures the difference between the portfolio’s holdings and its benchmark index. A portfolio that replicates the index will have an active share of 0%, while a portfolio that invests wholly in stocks outside the index will have an active share of 100%. 3 As of 31 December 2020
Disclosure
Important Benchmark InformationThe Sub-Fund is actively managed, seeking to deliver excess returns over the Sub-Fund’s benchmark. The holdings may or may not be components of the benchmark and the Investment Manager has broad discretion to deviate from the benchmark securities, weightings and risk characteristics. The degree to which the Sub-Fund resembles the composition and risk characteristics of the benchmark is not a specifically targeted outcome and could vary over time, and the Sub-Fund’s performance may be meaningfully different from the Sub-Fund’s benchmark.Key Risks Potential Investors should consider the following key risks before investing in the Sub-Fund:Equity Investing Risk: The value of shares and securities related to shares may fall due to issuer related issues, financial market dynamics and world events including economic and political changes.Concentration Risk: The Sub-Fund may invest in a limited number of securities compared to more diversified Sub-Funds or it may focus its investments and hold relatively large positions in, among other things, particular industries, countries, sectors, currencies or issuers. This may increase the volatility of the value of the Sub-Fund or for the Sub-Fund to bear losses and may also limit the liquidity of certain securities within the Sub-Fund.Derivative Risk: A Sub-Fund may use derivative instruments for both efficient portfolio management and for investment purposes. Derivative transactions may be subject to significant volatility which may result in a loss greater than the principal amount invested.Counterparty Risk: A Sub-Fund may have credit exposure (by virtue of position in swaps, repurchase agreements, FDI etc.) to its trading parties and may bear the risk of default of the counterparties.Operational Risk: A Sub-Fund may risk loss resulting from process failures, inadequate procedures or controls.Currency Risk - Base Currency: Securities may be denominated in currencies different from the Sub-Fund's Base Currency and there is a risk that changes in exchange rates and exchange control regulations may cause the value of the assets expressed in the Base Currency to rise or fall.Emerging Markets Risk: Emerging markets are typically smaller, less transparent, and subject to evolving, less stable political and regulatory regimes and securities from these markets may be more expensive to transact in, bear higher risk or have lower liquidity.Counterparty Risk – Depositary and Sub-Custodians: Custody services in many emerging markets remain undeveloped and there is a transaction and custody risk of dealing in emerging market investments.Risks Relating to China: Risks of investing in China arise from an uncertain taxation and political regime, restrictions on inward investment, dealing in closed currency and custody arrangements which are not to the same standard as those in developed markets and where the Sub-Fund invests in eligible China A-Shares via the Stock Connect, such investments are subject to risks including market, suspension and operational risks.Liquidity Risk: The risk that the Sub-Fund may invest some of their assets in illiquid securities and other illiquid financial instruments, in respect of which they may not always be possible to execute a buy or sell order at the desired price or to liquidate the open position.The risk factors described above should not be considered an exhaustive list of risks, which potential investors should consider before investing in the Sub-Fund. For more details on the fund's potential risks please read the Prospectus and Key Investor Information Document at pinebridge.com/fundsFor professional investor use only; not intended for retail investors.Unless otherwise stated, all information is as 31 December 2020 and sourced from PineBridge Investments internal data. Investment involves risks. Past performance is not indicative of future performance. This material does not constitute investment, financial, legal, tax, or other advice; investment research or a product of any research department; an offer to sell, or the solicitation of an offer to purchase any security or interest in a fund; or a recommendation for any investment product or strategy. PineBridge Investments is not soliciting or recommending any action based on information in this document. Any opinions, projections, or forward-looking statements expressed herein are solely those of the author, may differ from the views or opinions expressed by other areas of PineBridge Investments, and are only for general informational purposes as of the date indicated. Views may be based on third-party data that has not been independently verified. PineBridge Investments does not approve of or endorse any republication of this material. You are solely responsible for deciding whether any investment product or strategy is appropriate for you based upon your investment goals, financial situation and tolerance for risk. Investors should seek professional advice and refer to the PineBridge Global Fund’s Prospectus, the Key Investor Information Document (KIID), and the most recent financial statements, which include risk factors and terms and conditions and which should be read before investing, and may be obtained free of charge in Ireland from PineBridge Investments Ireland Limited, or any of its appointed distributors. The Fund is not available for investment in the U.S. or to or for the account of U.S. persons.PineBridge Asia ex Japan Equity Fund (the “Fund”) is a sub-fund of PineBridge Global Funds, an Irish domiciled UCITS umbrella fund, authorized and regulated by the Central Bank of Ireland. PineBridge Investments is a group of international companies that provide investment advice and market asset management products and services to clients around the world. PineBridge Investments is a registered trademark proprietary to PineBridge Investments IP Holding Company Limited.Material change to the Fund: From 31 December 1998 to 30 November 2011, the benchmark of the Fund was MSCI All Country Far East ex Japan Daily Total Return Net Index. With effect from 1 December 2011, the benchmark of the Fund was changed to MSCI All Country Asia ex Japan Daily Total Return Net Index. Such change was made because the Investment Manager of the Fund reasonably considers that such benchmark of the Fund’s indices have become the industry standard for the relevant exposure.Morningstar Rating™ Source: Morningstar Essentials™. Copyright © 2021 Morningstar, Inc. All Rights Reserved. Morningstar Rating in the ASIA EX JAPAN EQUITY Morningstar Category. Morningstar Performance ratings shown reflect the share class performance shown unless noted otherwise. Source Benchmark Attribution: MSCI. MSCI makes no express or implied warranties or representation and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indexes or any securities or financial products. This report is not approved, endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.This material is issued by: PineBridge Investments Ireland Limited, 4th Floor, The Observation Building, 7-11 Sir John Rogerson’s Quay, Dublin 2, Ireland, authorised and regulated by the Central Bank of Ireland.
