Bottom-up strategy pays dividends

Named this year’s Best Equity Manager in Taiwan in Asia Asset Management’s (AAM) Best of the Best Awards 2022, Nomura Asset Management Taiwan (Nomura SITE) has successfully bolstered its product offerings and investment capabilities to provide investors with comprehensive access to semiconductor and pandemic recovery related sectors.

As the first UCITS fund manager in Taiwan, Nomura SITE excels at bottom-up investment strategies, a strength that is epitomised by the fact that its flagship Greater China Equity Fund outperformed the industry with a 175% growth in assets under management over the past two years. 

According to Normura SITE Chief Investment Officer Vincent Bourdarie, the Greater China fund has been well positioned to take advantage of the rise of semiconductor manufacturing and foundry sectors in Taiwan, as well as China’s robust smart phone production industry. 

The Greater China fund was introduced by Nomura SITE, in partnership with Dutch manager NN Investment Partners in June 2019, with a focus on new technology. Bourdarie says the fund has been gaining popularity among local investors and is easily distinguishable from other Taiwanese semiconductor focused thematic funds with a more balanced structured portfolio. 

“In addition to placing a certain position on Taiwanese chip makers, the fund also invests in high-tech component producers in China,” Bourdarie says in an interview with AAM. 

He adds that as China’s supply chain becomes more high-tech oriented, Nomura’s the Greater China fund is well placed to capture this ongoing industrial transformation. In addition, the fund’s diversified allocation is designed to provide investors with a better source of diversification. 

On overall product strategy, Bourdarie notes thematic products will continue to be a major focus for the firm, as he believes topical investment strategies can help investors navigate various market cycles more easily compared to other broad based market funds. 

In the nine months to March 2022, Nomura SITE rolled out three global and domestic thematic funds, namely the Nomura Fallen Angel High Yield Bond Fund, Nomura Global Positive Change Fund, and Nomura Global Infrastructure Megatrend Fund. The firm’s product family currently comprises 49 mutual funds, including 23 equity funds, and 16 fixed income funds. 

“We are putting more emphasis on specific equities, fixed income, and multi-asset funds,” he says. “We’re also looking at opportunities relating to US inflation hikes, as well as the economic recovery [from the coronavirus] in individual markets.” 

Taking the newly launched global infrastructure fund as an example, Bourdarie says the fund is aimed at taking advantage of the US and Europe governments’ stimulus packages to support their infrastructure projects. 

Future growth

Looking forward, Bourdarie says the company will primarily focus on two key factors in the course of expanding its business. The first is the strengthening of its numerical driven, bottom-up, market analytic investment strategies. 

Bourdarie says the effort appears to have paid off, with the company having won various relative and absolute return mandates from institutional clients over the past few years. 

“We always strive to deliver as much as we can for clients… If we do that well, the flow will come to us over the mid to long term,” Bourdarie says. 

Second, the company will take heed of the needs of its clients and the market alike, and try to fill the void. For example, its new positive change fund is the first of its kind product in Taiwan to capitalise on opportunities from ecological transition. 

According to Bourdarie, the company will continue to look at macro factors such as coronavirus, inflation, and global economic recovery to differentiate its product mix. 

In terms of growth potential, he holds a positive view on the electric vehicle and consumption sectors in China and India, as well as the ASEAN equity and fixed income markets. 

Overall, Bourdarie says Nomura SITE aims to position itself as an all-round active manager. 

“We prefer to stay out of the passive investment business although Taiwan’s ETF market has been growing steadily… We would rather focus our efforts meeting the needs of long-term committed institutional investors with a high tolerance for tracking error,” he says.