Asia high conviction equities

Asia high conviction equities

As it grows, Asia is transforming – creating potential opportunities for discerning investors.

Driven by a rising middle class and an economic shift from manufacturing to services, business models and consumption patterns are changing. Some companies may prosper, others may fade away.

Lombard Odier Investment Managers takes a highly selective approach, focusing on the sectors and companies it expects to benefit most from Asia’s evolution.

Investing for the long-term, we put sustainability at the heart of our process.1

 

Asia: growth and transformation-

 

Icon 1.jpg (Print) Icon 3.jpg (Print)
Growth engine
Asia ex-Japan could contribute 30% of global consumption growth from 2015-2030.2
 
Structural change
Driven by a rising middle class, business models and consumer demand trends are changing.
 
icon-4.jpg Icon-2.jpg
Winners and losers
As Asian economies shift towards services, select sectors and companies may prosper.
Under-represented
Asia ex-Japan is under-represented in global equity indices, relative to its share of the overall market.3

 

why invest?

Asia is growing and evolving. We believe a focused approach is key to seizing the opportunities and managing risks.

 

Asia ex-Japan is driving worldwide growth and the rise of the global middle classes.4

 

Fast growth, profound change

Asia ex-Japan is forecast to grow faster than the rest of the world5, creating diverse opportunities for investors. However, global equity indices offer limited exposure to the region.6

Asia is also changing. We believe the financials, technology and consumer sectors are likely to be key beneficiaries of Asia’s transformation. Other sectors face structural headwinds as business models, lifestyles and demand patterns change.

We believe a highly-selective investment approach centred on sustainability is vital.

 

Selective and diverse

We target attractively-priced companies generating excess economic returns7 – and aim to avoid structurally-challenged business models.

To navigate economic cycles, we diversify across three themes:

  • Highly profitable businesses with dominant, defensible market positions
  • Businesses with high growth potential
  • Corporate event candidates, such as businesses that may be acquired or merged

 

investment team.

 

LOcom_AuthorsAM-Chen.png Zhikai Chen
Portfolio Manager, Hong Kong
locomauthorsam-lange-broussypng Odile Lange-Broussy
Portfolio Manager, Singapore
LOcom-AuthorsAM-Wong-1.png Roxy Wong
Portfolio Manager, Hong Kong
LOcom-AuthorsAM-Ouyang.png Jinwen Ouyang
Portfolio Manager, Hong Kong

 

The investment team has 19 years of relevant experience on average. The team works closely with the wider Lombard Odier IM global equities team to leverage knowledge and share insights.

 

investment strategy and philosophy.

 

We believe a highly-selective investment approach centred on sustainability is vital for investors in Asia ex-Japan.

 

At Lombard Odier Investment Managers, we believe sustainability will drive future return potential.8

We adopt a three-pillar approach to finding sustainable businesses, looking for those with sustainable financial models, sustainable business practices and sustainable business models. 

1
Sustainable financial models 
We look to identify excess economic returns, focusing on companies with capital efficiency, cash generation and limited dependency on external capital.
2 Sustainable business practices 
The team also considers extra-financial information (Environmental, Social and Governance criteria) aimed at avoiding the worst corporate practices and controversies which can be damaging both to society and to investment returns.
3 Sustainable business model 
We believe that companies with business models that are well-positioned for long-term trends – such as the transformation taking place across Asia – will have staying power through economic cycles.

 

The end result 

The result is a high conviction portfolio of 40-50 stocks that seeks to invest in attractively priced companies set to benefit from Asia’s growth and evolution, with the potential to achieve above-market growth and navigate economic cycles.

 

sub-fund details.

LO Funds – Asia High Conviction

sources.

1 There can be no assurance that the Sub-Fund’s investment objective will be achieved or that there will be a return on capital or that a substantial loss will not be incurred.
2 Source: McKinsey Global Institute estimates, April 2016. Includes Asia and Australasia cities but excludes Central Asia.
3 Source: Bloomberg, 30 November 2017. MSCI World Index market capitalisation in USD split by geographies.
4 Source: LOIM.
5 Source: OECD Data 2015.
6  Source: Bloomberg, 30 November 2017. MSCI World Index market capitalisation in USD split by geographies.
7 There can be no assurance that the Sub-Fund’s investment objective will be achieved or that there will be a return on capital.
8 There can be no assurance that the Sub-Fund’s investment objective will be achieved or that there will be a return on capital or that a substantial loss will not be incurred. For illustrative purposes only. Holdings/allocations are subject to change. Past performance and forecasts are not a reliable indicator of future returns of the Sub-Fund.

 

important information

Lombard Odier Funds (hereinafter the “Fund”) is a Luxembourg investment company with variable capital (SICAV). The Fund is authorised and regulated by the Luxembourg Supervisory Authority of the Financial Sector (CSSF) as an Undertaking for Collective Investments in Transferable Securities UCITS under Part I of the Luxembourg law of the 17 December 2010 implementing the European directive 2009/65/EC, as amended (“UCITS Directive”). The Management Company of the Fund is Lombard Odier Funds (Europe) S.A. (hereinafter the “Management Company”), a Luxembourg based public limited company (SA), having its registered office at 291, route d’Arlon, 1150 Luxembourg, Grand Duchy of Luxembourg, authorised and regulated by the CSSF as a Management Company within the meaning of EU Directive 2009/65/EC, as amended. This marketing document relates to “Asia High Conviction,” a Sub-Fund of Lombard Odier Funds (hereinafter the “Sub-Fund”).
This marketing communication was prepared by Lombard Odier Asset Management (Europe) Limited.
The prospectus, the articles of incorporation, the Key Investor Information Documents, the subscription form and the most recent annual and semi-annual reports are the only official offering documents of the Sub-Fund’s shares (the “Offering Documents”). The Offering Documents are available in English, French, German and Italian at www.loim.com and can be requested free of charge at the registered office of the Sub-Fund in Luxembourg: 291 route d’Arlon, 1150 Luxembourg, Grand Duchy of Luxembourg.
The information contained in this marketing communication does not take into account any individual’s specific circumstances, objectives or needs and does not constitute research or that any investment strategy is suitable or appropriate to individual circumstances or that any investment or strategy constitutes a personal investment advice to any investor. This marketing communication is not intended to substitute any professional advice on investment in financial products. Before making an investment in the Sub-Fund, an investor should read the entire Offering Documents, and in particular the risk factors pertaining to an investment in the Sub- Fund. We would like to draw the investor’s attention toward the long-term nature of delivering returns across the economic cycle and the use of financial derivative instruments as part of the investment strategy may result in a higher level of leverage and increase the overall risk exposure of the Sub-Fund and the volatility of its Net Asset Value. Investors should take care to assess the suitability of such investment to his/her particular risk profile and circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. There can be no assurance that the Sub-Fund’s investment objective will be achieved or that there will be a return on capital. Past performance is not a reliable indicator of future results. Where the Sub-Fund is denominated in a currency other than an investor’s base currency, changes in the rate of exchange may have an adverse effect on price and income. Please take note of the risk factors.
Any benchmarks/indices cited herein are provided for information purposes only. No benchmark/ index is directly comparable to the investment objectives, strategy or universe of a Sub-Fund. The performance of a benchmark shall not be indicative of past or future performance of any Sub-Fund. It should not be assumed that the relevant Sub-Fund will invest in any specific securities that comprise any index, nor should it be understood to mean that there is a correlation between such Sub-Fund’s returns and any index returns. Target performance/risk represents a portfolio construction goal. It does not represent past performance/risk and may not be representative of actual future performance/ risk.
The information and analysis contained herein are based on sources considered to be reliable. Lombard Odier makes its best efforts to ensure the timeliness, accuracy, and completeness of the information contained in this marketing communication.
Nevertheless, all information and opinions as well as the prices, market valuations and calculations indicated herein may change without notice. Source of the figures: Unless otherwise stated, figures are prepared by Lombard Odier Asset Management (Europe) Limited. The tax treatment depends on the individual circumstances of each client and may be subject to change in the future. Lombard Odier does not provide tax advice and it is up to each investor to consult with its own tax advisors.
NOTICE TO RESIDENTS IN THE FOLLOWING COUNTRIES:
Austria – Paying agent: Erste Bank der österreichischen Sparkassen AG.
Belgium – Financial services provider: CACEIS Belgium S.A. The Sub-Fund is not appropriate for Belgian retail investors unless the investment subscription is more than EUR 250,000. Please contact your tax advisor to identify the impacts of the Belgian tax “TOB” (“Taxe sur les Operations Boursières”) on your transactions, as well as the impacts of the withholding tax (“Précomptes mobiliers”). Lombard Odier has an internal Complaints Management Service. You can lodge a claim via your Relationship Manager or directly to Lombard Odier (Europe) S.A. Luxembourg, Belgium Branch, Claim Management Service, Avenue Louise 81, Box 12, 1050 Brussels, Fax: (+32) 2 543 08. Alternatively you can address your complaint free of charge to the national complaint service in Belgium, OMBUDSMAN: North Gate II, Boulevard du Roi Albert II, n°8 Boîte 2 2, 1000 Brussels, Tel : (+32) 2 545 77 70, Fax : (+32) 2 545 77 79, Email: Ombudsman@Ombusfin.be.
France – Centralising agent: CACEIS Bank.
Germany – German Information and Paying agent: DekaBank Deutsche Girozentrale.
Italy – Paying agents: Société Générale Securities Services S.p.A., State Street Bank International GmbH – Succursale Italia, Banca Sella Holding S.p.A., Allfunds Bank S.A.U., Milan Branch, BNP Paribas Securities Services, CACEIS Bank, Italy Branch.
Liechtenstein – Paying agent: LGT Bank AG.
Luxembourg – Depositary, central administration agent, registrar, transfer Agent, paying agent and listing agent: CACEIS Bank, Luxembourg Branch.
Netherlands – Paying agent: Lombard Odier Asset Management (Europe) Ltd, Netherlands Branch.
Spain – Paying agent: Allfunds Bank S.A.U. – CNMV Number: 498.
Sweden – Paying agent: Skandinaviska Enskilda Banken AB (publ).
Switzerland – The Sub-Fund is registered with the Swiss Federal Financial Market Supervisory Authority (FINMA). The Offering Documents together with the other Shareholders’ information are available free of charge at the Swiss Representative: Lombard Odier Asset Management (Switzerland) S.A., 6, avenue des Morgines, 1213 Petit-Lancy, Switzerland. Swiss Paying Agent: Banque Lombard Odier & Co Ltd. 11, rue de la Corraterie 1204 Genève, Switzerland. Publications about the Sub- Fund: www.fundinfo.com. The issue and redemption prices and / or the net asset value (with the mention “excluding commissions”) of the Share classes distributed in Switzerland: www.swissfunddata.ch and www.fundinfo.com. Bank Lombard Odier & Co Ltd is a bank and securities dealer authorised and regulated by the Swiss Financial Market Supervisory Authority (FINMA).
United Kingdom – This document is a financial promotion and has been approved for the purposes of Section 21 of the Financial Services and Markets Act 2000, by Lombard Odier Asset Management (Europe) Limited. It is approved for distribution by Lombard Odier (Europe) S.A., London Branch for Retail Clients in the United Kingdom. The Sub-Fund is a Recognised scheme in the United Kingdom under the Financial Services and Markets Act 2000. UK regulation for the protection of retail clients in the UK and the compensation available under the UK Financial Services Compensation scheme does not apply in respect of any investment or services provided by an overseas person. UK facilities agent: Lombard Odier Asset Management (Europe) Limited. Lombard Odier (Europe) S.A. UK Branch is a credit institution regulated in the UK by the Prudential Regulation Authority (PRA) and subject to limited regulation by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). Details of the extent of our authorisation and regulation by the PRA and regulation by the FCA are available from us on request.
Singapore – The Sub-Fund is not authorised or recognised by the Monetary Authority of Singapore (“MAS”) and the Shares are not allowed to be offered to the retail public in Singapore. Each Sub-Fund is a restricted scheme under the Sixth Schedule to the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations of Singapore. This document can be transmitted only (i) to “institutional investors” pursuant to Section 304 of the Securities and Futures Act, Chapter 289 of Singapore (the “Act”), (ii) to “relevant persons” pursuant to Section 305(1) of the Act, (iii) to persons who meet the requirements of an offer made pursuant to Section 305(2) of the Act, or (iv) pursuant to, and in accordance with the conditions of, other applicable exemption provisions of the Act.
European Union Members: This marketing communication has been approved for issue by Lombard Odier (Europe) S.A. The entity is a credit institution authorised and regulated by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg. Lombard Odier (Europe) S.A. branches are operating in the following territories: France: Lombard Odier (Europe). S.A. Succursale en France, a credit institution under limited supervision in France by the Autorité de contrôle prudentiel et de résolution (ACPR) and by the Autorité des marchés financiers(AMF) in respect of its investment services activities; Spain: Lombard Odier (Europe) S.A. Sucursal en España, Lombard Odier Gestión (España) S.G.I.I.C., S.A.U., credit institutions under limited supervision in Spain by the Banco de España and the Comisión Nacional del Mercado de Valores (CNMV).
United States: Neither this document nor any copy thereof may be sent, taken into, or distributed in the United States or given to any US person.
This marketing communication may not be reproduced (in whole or in part), transmitted, modified, or used for any public or commercial purpose without the prior written permission of Lombard Odier.
© 2018 Lombard Odier Investment Managers – all rights reserved.