Investors warm up to regional exposures

10-Dec-2015

By Wouter Klijn

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Institutional investors were starting to move away from the typical international versus Australian equity approach and were starting to allocate to regional, in some cases even single country, exposures, according to Korean asset manager Mirae Asset Global Investments.

“Traditionally, a lot of the Australian super funds had broad equity allocations and might have put a little bit of money into global emerging markets,” Mirae head of Australian sales Chris Wildman said in an interview with theinstoreport.

“But people are starting to take a far more granular approach.

“Some of the really big super funds have a little more capital to invest and I have noticed that some of those have started to look at specific country exposures.

“One of the large super funds down in Melbourne is specifically looking at India.

“Other funds have taken exposures to various other locations in Asia as well, whether it is through an ETF (exchange-traded fund) or an active exposure.”

Although Mirae is a significant shareholder in ETF provider BetaShares, Hong Kong-based Mirae chief marketing officer Ashley Dale said many Asian markets required an active approach.

“We all know what happened in the third quarter in China and if you were invested in an index tracker, you would have lost an awful lot of money,” Dale said.

“I was at a sovereign wealth conference last week and everyone is on the hunt for alpha.

“Beta is gone, you need alpha and you can only do it through active management.

“Particularly in Asia, the benchmarks are totally backward looking, wholly unrepresentative of what is going on in these economies today, and so if you want to beat those benchmarks, you need to find active managers with feet on the ground.”

Mirae has offices all over the world, including in Europe, the United States and Latin America, but it only just opened an Australian office after recruiting Wildman.

He joined from AMP Capital, where he was an institutional business executive for almost six years.

Dale said the timing to open up shop in Australia was largely due to the fact Mirae had now built up three to five-year track records in its flagship funds, including an Asian sector and an Asian consumer strategy.

“Australia has taken a little while to come on board because you only have one shot for the title and this is a hugely important market for all international asset managers,” he said.

“We wanted to make sure that we had the right products and track record to launch.

“That is really why we are coming now [to Australia].”

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