16 december 2011

Edmond de Rothschild Asset Management is launching

Edmond de Rothschild Asia Leaders

and putting Asian growth at the heart

of its investment management

- The crisis has highlighted the increasing role played by Asian countries in the global economy.  

- Asia now represents a dynamic, diversified investment zone where consumption, infrastructure and energy supply now represent a source of secular growth across the entire region.  

- This is why Edmond de Rothschild Asset Management is innovating and launching Edmond de Rothschild Asia Leaders, a fund which invests mainly in Asian large cap stocks which have the potential to emerge as leaders on their markets over the mid to long term.

- The fund will be run by Thomas Gerhardt, head of emerging market equities and commodities and David Gaud who manages Asian equities. The investment team now comprises 12 fund managers based in Paris, Hong Kong and Frankfurt and another fund manager specialised in emerging markets will be joining in January.  

INVESTING IN ASIA, A DYNAMIC AND DIVERSIFIED ZONE 

Asian countries are not a single bloc. Per capita GDP is low in China, India, Indonesia and the Philippines but rather high in Taiwan and South Korea. South Korea is famous for ship building while Singapore is known for its tertiary sector.

Three major investment themes apply to the entire region and represent a source of sustainable growth: consumption, infrastructure and energy supplies. 

Consumption

This essentially concerns China, India and Indonesia where purchasing power is constantly rising. Economic growth is being driven by an exponential increase in the number of people old enough to spend, the fact that young people tend to spend more and a significant increase in wages. For example, retail sales in China are currently growing at around twice the GDP and have increased by 18% in 2010. 

Infrastructure

The infrastructure theme also involves focusing on China, India and Indonesia. The budget for the Ministry of Public Works in Indonesia has risen sharply from 3.3% of the total state budget in 2010 to 5% in 2011. China has already made considerable investments in infrastructure over the last 10 years and will have to maintain this pace in the years to come. India, meanwhile, has no choice but to invest massively in building roads, bridges and ports and developing electrical infrastructure. 

Energy supplies

Demand for energy keeps on rising. China and India are big importers of coal and oil. Indonesia, on the other hand, is full of coal mines and is the largest exporter of thermal coal in the world.