Aberdeen Veteran Investor ‘Missed Out’ on One of Pandemic’s Hot Trades
(Bloomberg) -- Having bought some of the hottest stocks in Asia this year, veteran investor Hugh Young regrets not buying one group of shares: Malaysia’s glove makers.
“We didn’t have the huge exposure to them when they were doing well,” the head of Asia Pacific at Aberdeen Standard Investments said. “We missed out on them completely for our small- and large-cap funds, so it’s just in our Malaysian fund that we had them.”
Even after coming off their 2020 peaks amid progress on Covid-19 vaccines, glove-makers can boast of dizzying year-to-date gains, with Supermax Corp. easily beating the likes of Tesla Inc. with a more than 1,100% surge.
The fundamentals of the businesses are intact as hospitals and health service providers will stock up on gloves to avoid shortages but “it’s hard to see people getting as passionate” about the stocks next year at such high valuations, Young said. The industry is also affected by cyclical factors such as rubber prices, which are set to recover as economies exit the pandemic’s impact, he added.
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Young is maintaining his allocation to tech stocks -- the hottest trade globally this year -- “to maintain a balance” between old and new economy sectors. Tencent Holdings Ltd., Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. were among the top holdings of Aberdeen’s Asia Pacific equity fund as of end-October. The $2.6 billion fund is up 19% year-to-date, according to data compiled by Bloomberg.
Here are some more views:
- Asian stocks should outperform “in many scenarios” because they are cheaper and the region has better economic growth
- Indonesia is “frustrating” despite impressive economic growth, Young said, because of slow enactment of business-friendly reforms by the government. He prefers banks and consumer stocks in the country
- The fund’s Southeast Asia exposure is about 10% with weightings in Singapore, Indonesia, the Philippines and Thailand
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