Tempering Asian market volatility

John Pereira

Asian equity markets are likely to remain volatile for some time and, as such, investors are well-advised to adopt absolute return strategies, according to Olympus Funds Management managing director John Pereira.

“In Asia’s case, the best strategy is most definitely a diversified approach to absolute return because it’s the strategy best able to take advantage of volatile markets,” he said.

Pereira said that absolute return strategies, which aim to generate positive returns in both rising and falling markets, are perfectly suited to Asia’s emerging markets.

In his view, recent market falls in the region have created strong buying opportunities.

“Now is a great time to be investing in Asia because the market represents better value.”

Pereira said although many Asian markets were likely to remain volatile for “some time”, the long-term growth potential of China and India, for example, is too great to ignore.

“It’s a mistake to think that volatility is going to end in the short term, but it’s also a mistake to think that volatility will prevent investors from enjoying growth in the region.”

Olympus’ Asia Diversified Fund invests in absolute return fund managers in high-growth Asian economies such as China and India.

Pereira pointed out that Olympus’ Indian Equities Fund, which it floated in April this year, raised $75 million from about 4,000 investors in April when Indian markets were down. He said the fund has since grown its portfolio by more than 40 per cent to $101.2 million.