The Equity team adopts a four-step approach to investing.
The idea generation phase of the process is a systematic starting point to identify potential investment candidates from the greatest valuation outliers. A number of proprietary valuation screens are used to allow the team to cover a large universe of companies and assist in identifying the best potential value opportunities. This approach also facilitates the efficient allocation of the team’s resources and thus enables the team to concentrate only on what matters most.
We perform rigorous fundamental analysis and intensive research of our investment candidates to identify behavioral sources of mispricing and the drivers of sustainable earnings. In essence, we analyse a company’s history of delivered earnings versus its competitors and the potential for a structural change in its competitive position. Our focus on a company’s sustainable earnings differentiates us from a market that obsesses over the most recent earnings. The market’s short term focus ultimately contributes to the kind of herding behavior which drives prices to extremes. This offers significant opportunities for our price sensitive but patient approach.
The strongest stock ideas from the above research process become candidates for inclusion in a portfolio. Portfolio construction is structured to ensure that we take on active risk in a diversified manner, which reinforces our ability to take long-term positions without being forced to close positions in response to excessive volatility. The “margin of safety” concept is key; portfolio positions are initiated and monitored by assessing current or proposed positions against the potential return and relative valuations.
Risk control and review
Portfolios are actively reviewed by the focus teams in weekly reviews to ensure risk budgets are met. The monitoring of positions relative to valuation and risk contribution aids review and ensures the integrity of the investment process.
Our equity strategies include core regional and single country portfolios, as well as various dynamic and thematic portfolios that cater to different investor needs.
In Asia, our coverage of developed markets includes Japan, Australia, New Zealand, Hong Kong, Singapore, South Korea and Taiwan; and in emerging markets we cover China, India, Indonesia, Malaysia, the Philippines and Thailand. In recent years, we have also expanded our coverage to include global emerging markets.
All our strategies seek to exploit behavioural biases inherent in markets and to benefit from pricing episodes that move stock prices away from our assessment of companies’ fundamental value.
Eastspring has a long history of investing across all of Asia. Apart from managing funds for the Prudential Group, we also serve a wide range of institutional and retail clients. In recent years, our equity capabilities have expanded to include global emerging markets.
The equity team comprises sub-groups of small, highly cohesive focus teams that reinforce intellectual rigour and streamline the investment decision process.
We operate under a culture of debate and challenge – maximising a creative team dynamic, intensely questioning assumptions and distilling our best ideas from the bottom-up.
Assets under management
USD 35 billion
(as at 31 December 2016)
- Global Emerging Market (GEM)
- Asia Equity
Our specialist teams include: