The tiger claws back: Asian funds roar

Asian markets appear to have turned the corner with specialist Asian funds emerging as the powerhouse performers of 1999.

Some funds have recorded meteoric returns for the past six months including Fidelity Perpetual's South East Asian fund which has returned just over 33 per cent, according to Assirt figures. If this performance is repeated over the next six months, it would see the fund return more than 60 per cent on an annualised basis.

Other specialist funds have not been far behind Perpetual. BT Select Markets Pacific Basin fund, the largest Australian managed fund in this area, has posted returns for the period of 28 per cent.

Fund managers are putting the bullish run on Asian markets down to a turnaround in the region's economies, particularly in corporate profitability.

HSBC Asset Management's chief investment officer for the Asian Pacific region, Ian Burden, says the dramatic turnaround in South East Asian markets is the beginning of a strong recovery.

"The region's markets were utterly smashed after July 1997, but I think they're past their worst," he says. "We feel that if global optimism is in the air, we would expect Asia to be part of that."

Christopher Ong, portfolio manager for Asian funds at BT, agrees with this view, adding, "the turnaround in Asian markets happened quicker than expected."

BT Select Markets Pacific Basin fund, for which he is responsible, has suffered major haemorrhaging since the so-called Asian crisis hit in July 1997. In March 1997, the fund was worth $883 million dollars which had fallen to $317 million at the end of March this year.