Stewart Investors Asia Pacific All Cap
Previously Stewart Investors Asia Pacific Sustainability
Stewart Investors Asia Pacific All Cap fund invests in quality, long-term growth companies. The team uses a pragmatic and sensible approach, ensuring the management of underlying company holdings are responsible and conscientious, in keeping with the fund's sustainable title. The fund is very similar to the Stewart Investors Asia Pacific Leaders fund, except that it invests in companies of any size, whereas the Leaders fund invests in medium and large firms.
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David Gait, Co-Manager David is Head of the Sustainable Funds Group and a Portfolio Manager at Stewart Investors, where he has been since 1997. He manages the Asia Pacific Leaders Sustainability, Asia Pacific Sustainability strategies, and the Pacific Assets Investment Trust. David is also a member of the Stewart Investors Board. He holds an MA with honours in Economics from Cambridge University and a Master of Science in Investment Analysis from Stirling University.
Sashi Reddy, Co-Manager Sashi Reddy joined Stewart Investors in August 2007, where he generates investment ideas for the Sustainable Funds group. With 15 years of experience, including 12 years in financial services, he previously worked at Irevna Research from 2005 to 2007. Sashi holds an engineering degree from the National Institute of Technology, Trichy, and an MBA from the Schulich School of Business, York University in Toronto.
David Gait, Co-Manager David is Head of the Sustainable Funds Group and a Portfolio Manager at Stewart Investors, where he has been since 1997. He manages the Asia Pacific Leaders Sustainability, Asia Pacific Sustainability strategies, and the Pacific Assets Investment Trust. David is also a member of the Stewart Investors Board. He holds an MA with honours in Economics from Cambridge University and a Master of Science in Investment Analysis from Stirling University.
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Company Description
Stewart Investors, awarded the Elite Provider for Equities Rating in both 2016 and 2017, manages investment portfolios on behalf of clients over the long term and has held shares in some companies for over 20 years. It launched its first investment strategy in 1988. For over three decades it has applied the same investment philosophy consistently across all investment strategies. Stewart Investors is part of the First Sentier Investors group but operates with discrete investment autonomy, according to its investment philosophy.
Fund Performance
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Investment process
Stewart Investors’ investment philosophy is centred around the idea of 'stewardship'. Its managers look after all client money as if it were their own. They ignore benchmarks and peer groups and focus solely on delivering the best outcomes for clients. Capital preservation is at the heart of the process.
The stewardship focus leads managers to only invest in businesses where all stakeholders (shareholders, employees and customers) are well treated. Corporate governance is critical and the managers will only invest in companies where the interests of minority shareholders are respected. These requirements immediately rule out a large part of the index and many state-owned enterprises. Therefore, this is a fund that typically looks very different to its benchmark index. Stewart Investors managers are long-term investors and there are some businesses they have owned for more than 20 years.
David’s and Sashi’s process is focused on individual companies and largely ignores changes in the macroeconomic environment. Investment ideas are generated from company visits, research trips and industry contacts. Company meetings and assessing company management are a critical part of their process. They look for integrity, humility, sustainability, risk awareness and emotional engagement from management. Most companies are visited at least once before an initial investment is made.
Valuation and price are considered at the initial point of investment. The managers are happy to pay a fair price for a business, but they will avoid paying extremely high prices, in line with their views on capital preservation. They avoid investing in speculative companies.
Asset allocation on a geographic and sector level is a result of the stock selection process. The portfolio is concentrated, with around 60 holdings.
Risk
Risk is managed primarily at the stock level through investing in soundly-managed, financially-strong and sensibly-priced companies. There are formal sector limits for geography and sectors; the fund’s exposure to any of Australia, China (via Hong Kong), Hong Kong, India, Singapore, South Korea or Taiwan must not exceed 50%. They are not required to own any sector or country if there are no good investment opportunities.
ESG
ESG - Explicit
Stewart Investors aims to invest in high-quality companies that contribute to, and benefit from, the sustainable development of the countries in which it operates. The firm has been running sustainability investment strategies since 2005 and has a strong process. The managers believe that sustainable development is a key driver of investment performance and consider sustainability as integral to the investment process, using it as the starting point when analysing a company. As part of the bottom-up investment process, the managers do not invest in companies with material exposure to harmful products and services, or which fail to discharge their environmental stewardship and human rights responsibilities. For example, they will not invest in companies involved in fossil fuels, nuclear energy, alcohol production, tobacco production, gambling, pornography, armaments manufacturing and any with poor records in human rights standards.
The portfolios are reviewed by an external ESG research provider that reports on any company involved in harmful industries or that does not meet the principles which sit at the heart of the investment philosophy. The team will engage with management to resolve any issues or divest if no change is forthcoming.
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