Download November 2016 - JOM Fund Management

JOM SILKKITIE INVESTMENT FUND
Monthly Report November 2016
JOM Silkkitie Investment Fund’s NAV was 267.81 at the end of November, thus the
JOM SILKKITIE, NET ASSET VALUE (30 November 2016)
267.81
performance during the month stood at -3.26%. YTD performance was +12.88% on
Fund size
56.24 mEUR
30 November 2016.
Number of fund units
209 982.5509
During November we sold off our only media company in the Philippines. In China
Inception date
31.7.2009
we sold off one smaller company while introducing a new interesting company from
Last month’s performance
-3.26%
the environmental sector into our portfolio. Indonesia’s weight was increased
Performance since inception
+167.81%
somewhat as Trump’s election surprise made many share prices very attractively
Annualised performance since inception
+14.36%
valued. There are now 39 stocks in the portfolio whose portfolio weighted market
Accumulated management fee*
1.10%
capitalization is 703m euros.
Accumulated performance fee*
0.00%
Accumulated custodian fee*
0.12%
Net investment position (prior to subscriptions on 30.11.2016)
98.6%
Volatility**
14.5%
Portfolio turnover
212.3%
OVERVIEW OF THE FUND
Equities by Investment Themes
Infra
13 %
Green & Clean
4%
Financial &
Property
15 %
Global Leaders
4%
Consumers
64 %
Geographical Break-down of
Equities
Myanmar
4%
Vietnam
22 %
Malaysia
4%
Philippines
17 %
China
13 %
Name:
JOM Silkkitie Fund (UCITS)
Portfolio Manager:
Juuso Mykkänen
Singapore
3%
Custodian:
SEB. Helsinki branch
Benchmark index:
No official index
Indonesia
37 %
JOM Fund Management Ltd
Salomonkatu 17 B, 00100 Helsinki, FINLAND
Tel: +358 9 670 115, Fax: +358 9 670 117
info @jom.fi www.jom.fi
Inception date: 31.7.2009
ISIN-code: FI4000003470
Bloomberg-ticker: JOMSILK FH
Fund target group:
Demanding investors who
understand the potential of
Asian equity markets in the long
run.
Profit sharing:
Minimum subscription: 5 000 €
The Fund has only accumulating
Subscription account:
units
IBAN: FI81 3301 0001 1297 17
Fund rules last confirmed:
BIC: ESSEFIHXXXX
16.2.2016
Management fee:
1.2% p.a.
Subscription fee:
1.5% - 0%
Redemption fee:
1% (min. 20 €)
Performance fee:
10% on the return exceeding the
hurdle rate of 5%. (pls see Fund
prospectus for details)
Past performance is no guarantee for future returns. The Fund value may increase or decrease, and the investor may incur losses when redeeming his
shares. MSCI AC Asia ex-Japan (EUR) is a price index, which takes dividends into account. Further details on JOM Silkkitie Investment Fund may be
found in the key investor information document, fund prospectus and fund rules, which are available by request from JOM Fund Management Ltd, or
on the website www.jom.fi. *For the fiscal period since 1.1.2016, % of fund average net assets. **Based on daily returns during 12 months. Detailed
formulas available from theFund Management Company.
JOM SILKKITIE INVESTMENT FUND
Monthly Report November 2016
JOM SILKKITIE, NAV (30 November 2016)
267.81
Fund size
56.24 mEUR
Last month’s performance
-3.26%
Annualised performance since inception
+14.36%
Volatility
14.5%
FUND CORRELATION (12M, DAILY) WITH SOME EQUITY INDICES (EUR)
Jakarta
Philippine
HK China H
MSCI Asia
Composite composite
shares
ex-Japan
Index JCI Index PCOMP
HSCEI
Topix
MSCI
World
Bloomberg
S&P 500 Europe 500
Index
Indonesia
Philippines
China
Asia
Japan
World
US
Europe
0.49
0.57
0.62
0.64
0.57
0.31
0.16
0.32
JOM SILKKITIE NAV VS. THE REGIONAL EQUITY MARKET INDEX
320
300
280
260
240
220
200
180
160
140
120
100
80
31.7.2009
17.1.2011
6.7.2012
24.12.2013
13.6.2015
30.11.2016
MSCI AC Asia ex-Japan (Total return, EUR)
JOM Silkkitie
FUND PERFORMANCE BI-ANNUALLY (%)
FUND PERFORMANCE MONTHLY (%)
+ 60 %
Jan
Feb
Mar
Apr
May
Jun
Jul
2009
-
-
-
-
-
-
-
2010
Aug
Sep
Oct
Nov
Dec
Year
-2.74 +7.49 +1.52 +0.40
+7.07
+14.08
+3.55
-0.05 +9.66 +4.00 -8.12 +0.74 +7.55 +2.46 +13.95 +2.45 +2.73
+6.39
+53.60
2011
-8.11
-1.34 +2.81 +3.17 -2.47 -0.62 +7.75 -10.15 -14.07 +5.83 -4.11
+4.73
-17.59
2012
+8.75 +4.07 +2.35 +1.85 -4.68 -2.26 +2.58 -5.49 +0.90 +4.59 +5.35
+2.51
+21.44
2013
+6.18 +6.82 +3.25 -0.51 +10.17 -11.08 -1.57 -6.91 +2.00 +3.54 -1.15
+2.88
+12.31
+ 40.60 %
2014
+2.31 +7.46 +0.14 +2.94 +2.21 -1.48 +7.98 +3.98 -1.25 -0.58 -0.33
-4.53
+19.72
2015
+6.02 +3.20 +5.89 +2.38 +3.81 -8.69 -3.22 -16.41 -2.44 +15.52 -1.36
-0.51
+0.61
2016
-9.61
+0.65 +5.97 +1.25 +1.71 +8.58 +7.75 +1.84 -1.66 +0.30 -3.26
+ 40 %
+ 20 %
+ 14.08 %
+ 9.25 %
+ 14.13 % + 14.13 %
+ 12.45 %
+ 10.48 %
+ 7.80 %
+ 9.92 %
+ 4.90 %
+ 4.71 %
+0%
-20 %
- 6.80 %
- 11.58 %
- 1.59 %
- 10.52 %
+12.88
JOM Fund Management Ltd
Salomonkatu 17 B, 00100 Helsinki, FINLAND
Tel: +358 9 670 115, Fax: +358 9 670 117
info @jom.fi www.jom.fi
Past performance is no guarantee for future returns. The Fund value may increase or decrease, and the investor may incur losses when redeeming his
shares. MSCI AC Asia ex-Japan (EUR) is a price index, which takes dividends into account. Further details on JOM Silkkitie Investment Fund may be
found in the key investor information document, fund prospectus and fund rules, which are available by request from JOM Fund Management Ltd, or
onthewebsite www.jom.fi.
JOM KOMODO INVESTMENT FUND
Monthly Report November 2016
JOM Komodo Investment Fund’s NAV was 158.05 at the end of November, as it
JOM KOMODO, NET ASSET VALUE (30 November 2016)
158.05
decreased by -6.93% during the month. YTD performance was +27.75% on
Size of the fund
12.14 mEUR
30 November 2016.
Number of fund units
76 798.4146
Inception date
15.5.2012
Last month’s performance
-6.93%
Performance since inception
+58.05%
Annualiced performance since inception
+10.59%
Accumulated management fee*
1.38%
Accumulated performance fee*
0.42%
During November we exploited the market slump by adding into our existing
Accumulated custodian fee*
0.21%
holdings in infrastructure and financials. There are now 28 stocks in the portfolio,
Net investment position (prior to subscriptions on 30.11.2016)
98.8%
while the portfolio weighted market capitalization of holdings is 411m euros.
Volatility**
17.2%
Portfolio turnover
132.2%
Fund’s correlation to JCI-Index (12m)
0.58
Indonesia’s Central Bank indicated in the beginning of December that the loan
growth cycle has finally started to climb upwards as the six rate cuts since early 2016
are now starting to work their way into the country’s banks. We see this as a very
positive sign for next year, as credit cycle has been the missing piece from
Indonesia’s growth equation.
FUND PERFORMANCE MONTHLY (%)
2012
Jan
Feb
Mar
Apr
-
-
-
-
FUND OVERVIEW
Dec
Year
-6.29 +0.42 +3.62 -8.02 +3.01 +0.71 +7.63 -4.57
-4.34
May
Jun
Jul
Aug
Sep
Oct
Nov
2013 +6.05 +17.64 +13.43 +1.54 +11.52 -11.79 -8.95 -20.95 -0.95 +7.28 -13.95 -3.40 -10.13
2014 +9.68 +15.86 +10.77 -1.42 +3.20 -6.05 +10.24 +8.15 -2.09 +2.30 +5.50 +2.61 +73.92
2015 +2.45 +0.04 +2.24 -8.35 +1.42 -6.30 +0.26 -16.99 -8.01 +21.09 -1.75 -0.47 -17.26
2016 -1.69 +3.01 +5.87 +0.63 -0.86 +8.49 +9.63 +4.12 -3.45 +7.33 -6.93
Name:
JOM Komodo Fund (UCITS)
Portfolio Manager:
Juuso Mykkänen
Custodian:
SEB. Helsinki branch
Benchmark index:
No official index
Profit sharing:
The Fund has only
accumulating units
Fund rules last confirmed:
16.2.2016
Inception date: 15.5.2012
ISIN-code: FI4000043401
Fund target group:
Demanding investors who
understand the potential of
Asian equity markets in the
long run.
Minimum subscription:
5 000 €
Subscription account:
IBAN:
FI75 3301 0001 1363 24
BIC: ESSEFIHXXX
Management fee:
1.5% p.a.
Subscription fee:
1.5% - 0%
Redemption fee:
2% (min. 20 €)
Performance fee:
10% on the return exceeding
the hurdle rate of 5%. (pls see
Fund prospectus for details)
+27.75
JOM Fund Management Ltd
Salomonkatu 17 B, 00100 Helsinki, FINLAND
Tel: +358 9 670 115, Fax: +358 9 670 117
info @jom.fi www.jom.fi
Past performance is no guarantee for future returns. The Fund value may increase or decrease, and the investor may incur losses when redeeming his
shares. Jakarta Composite Index (EUR) and MV Indonesia SmallCap Index (EUR) are price indices, which take dividends into account. Further details
on JOM Komodo Investment Fund may be found in the key investor information document, fund prospectus and fund rules, which areavailable by
request from JOM Fund Management Ltd, or on the website www.jom.fi. *For the fiscal period since 1.1.2016, % of fund average net assets. **Will
be calculated based on daily returns during 12 months. after the fund has sufficient track history. Detailed formulas available from the Fund
Management Company.
JOM KOMODO INVESTMENT FUND
Monthly Report November 2016
Equities by Investment Sectors
JOM KOMODO NAV VS. INDONESIA EQUITY INDICES
Basic Materials
8%
180
160
Consumer, Cyclical
20 %
140
120
Industrial
25 %
100
80
60
40
15.5.2012
15.2.2013
19.11.2013
23.8.2014
26.5.2015
27.2.2016
30.11.2016
Consumer, Noncyclical
17 %
Financial
30 %
JAKARTA COMPOSITE Index
MV Indonesia SmallCap TR Index (EUR)
JOM Komodo
JOM Fund Management Ltd
Salomonkatu 17 B, 00100 Helsinki, FINLAND
Tel: +358 9 670 115, Fax: +358 9 670 117
info @jom.fi www.jom.fi
Past performance is no guarantee for future returns. The Fund value may increase or decrease, and the investor may incur losses when redeeming his
shares.JakartaCompositeIndex(EUR) andMV IndonesiaSmallCapIndex(EUR)arepriceindices, whichtakedividendsintoaccount.Further detailson
JOM Komodo Investment Fund may be found in the key investor information document, fund prospectus and fund rules, which are available by
request fromJOMFund Management Ltd,oronthewebsite www.jom.fi.
JOM Funds
Monthly Report November 2016
The US presidential election was expectedly November’s main event in the global markets.
Car sales in Vietnam & Savico
The unpredicted win pulled off by Donald Trump triggered a tsunami of profit-taking from
The rapidly increasing car penetration in the emerging Asian countries is one of the long-
the emerging markets, with the severest hit taken by the countries with highest foreign
running themes in which we have invested through our funds. JOM Silkkitie -equity fund has
ownership of financial instruments. News of higher than expected growth and inflation
since the end of 2013 been an owner in Vietnam’s leading car sales company Savico, whose
added to the capital flight, especially from fixed income assets. At the same time the US
market share of the personal car sales is about 8-9 %. The company sells both new and used
stock market continued to inch upwards to even pricier levels, as mainly American investors
vehicles and it has a comprehensive and growing maintenance business. Savico’s repertoire
put their faith in the themes connected with Trump’s campaign promises.
consists of such brands as Toyota, Ford, Volvo, Suzuki and Hyundai. The company’s turnover
It is now clear that Trump will unlikely be able to deliver on many of his campaign promises.
For instance, massive tariffs on Chinese imports are next to impossible to impose without
sparking a global trade war. We are also highly skeptical that iPhones — or any other
smartphones — are going to be assembled in the US, not to mention production of shoes or
clothes.
is around 450 million euros, while its market cap is only 45 million euros. Savico’s profit
margins (0.75%) are still light-years away from its peers (3-8%) operating in Indonesia or the
Philippines. However, the company is focusing on the right things and we believe this will
lead to increased profitability in the coming quarters and years. It is worth bearing in mind
that Indonesia’s largest car dealer Astra International — having a market value in excess of
20 billion euros — was also a tiny company some years ago.
However, the promises of infrastructure investments may be fulfilled if the required
Vehicle ownership per family
financing can be acquired. Trump plans to improve the US infrastructure by 500 - 1 000
billion USD during the next 10 years, while at the same time cutting taxes! This would be
very beneficial for raw material producing countries, i.e. the emerging countries. To put the
magnitude of Trump’s intended infrastructure investments in perspective, they are in fact
quite diminutive — China invested over 1 500 billion USD in infrastructure in one year in
2015, and the figure will greatly increase this year.
Korea
83%
Malaysia
82%
Japan
81%
Thailand
51%
China
We are inclined to believe that the peak of the Trump-ecstasy is now over and the situation
regarding the emerging economies will gradually start to stabilize. Whereas in the beginning
of this year we witnessed an indiscriminant capital inflow into the emerging markets, we
believe the wheat will now more clearly be separated from the chaff. Indicators pointing to
this direction can already be seen; while the sell off still continues on the weaker markets,
such as Turkey, the capital inflows into more reform minded countries have already taken a
positive turn.
JOM Fund Management Ltd
Salomonkatu 17 B, 00100 Helsinki, FINLAND
Tel: +358 9 670 115, Fax: +358 9 670 117
info @jom.fi www.jom.fi
17%
Philippines
Indonesia
Pakistan
Vietnam
6%
4%
3%
2%
Source: Pew Research Centre
JOM Funds
Monthly Report November 2016
Indonesia 10yr bond yield
Car sales in Vietnam 2013-10/2016
250 000
9
200 000
8.5
150 000
8
100 000
7.5
50 000
7
2016/10
2015
2014
2013
6.5
Until Oct-2016 car sales increased by 28% YoY. Source: Vietnam Automobile
Association (VAMA).
Why was Indonesia hit more harshly than many other Asian markets?
Indo bond yields declining already, worst maybe be behind us. Source: Bloomberg.
Nearly 40 % of the Indonesian bonds are owned by foreign investors and the interest rates
FX reserves in Indonesia in 1998-2016
are relatively high compared to other Asian bonds, thus delivering very good yields to
institutional investors. For this reason, the Indonesian bonds are widely owned by foreign
140
institutional investors. Trump’s win, the increased pressure on US inflation and stronger than
120
expected views on growth made the EM fixed income assets the prime target of the selling
100
sell off also to the equity markets. Foreign investors withdrew over 900 million USD from the
Indonesian stock market in November, while at the same time selling Indonesian fixed
income assets worth over 1.45 billion USD.
Mrd USD
spree. This in turn led to the depreciation of the Indonesian Rupiah (IDR) transmitting the
80
60
40
While it is impossible to predict the duration of the selling spree, we believe it is very
probable that we are on the home stretch of the turmoil, as the interest on Indonesian
bonds is exceeding 8 %, which is very attractive level in the international context. It’s also
20
0
worth noting that remarkable structural reforms have been carried out during Jokowi’s
presidency, the country’s current account deficit has shrunk to under two percent, and the
economic cycle is gaining strength after hitting the bottom in 2015. In the light of these
factors, Indonesia has not been labelled as a weak case by the financial media, either.
JOM Fund Management Ltd
Salomonkatu 17 B, 00100 Helsinki, FINLAND
Tel: +358 9 670 115, Fax: +358 9 670 117
info @jom.fi www.jom.fi
Indonesia FX reserves account for +10 months worth of imports. Source: Bloomberg.
JOM Funds
Monthly Report November 2016
President Duterte’s reign has started at a high tempo in the Philippines. Despite his
Tourism is expected to become an important growth driver in the Philippines. Duterte’s
questionable image portrayed by the western media mainly focusing on his violent war on
predecessor Aquino had high ambitions regarding tourism, but he could nevertheless not
drugs and undiplomatic blurts, Duterte has already secured investment commitments worth
reach the targets set for infrastructure and tourism. Aquino’s goal was to attract 10 million
tens of billions of dollars from China and Japan, as well as other countries across the globe.
yearly tourists into the country by 2016, but he failed as the number of tourists in 2015 was
As a result of the anti-drug campaign, the crime has been cut down by over 40 % in the
only 5.5 million. The ministry of tourism has now postponed the goal of 10 million tourists
Philippines in just four months. Duterte also got lucky when his soul-mate Donald Trump was
until 2020, but there has recently been talk about stepping up the number to 14 million
elected as the new president of the United States. From our point of view Duterte’s early
tourists by 2020. Many private companies are currently accelerating the building of tourist
presidency has started fairly satisfactorily, and the above-mentioned risks have recently
sites, which in itself is a very positive growth sign for the industry. With respect to scuba
been somewhat diluted.
diving, beach sites and the nature – to name a few – the country is top of the class even
The Philippines
The Philippines is the fastest growing economy in the Asia. In the third quarter this year the
country’s economy grew by 7.1 % compared to the same period last year. The investment
cycle keeps on spinning at a good pace and is gaining speed as the public sector is increasing
its involvement through infrastructure investments going forward.
globally, but the lack of infrastructure necessary to support tourism is presently the biggest
obstacle to reaching even higher growth figures. Taking into account Duterte’s trait of being
an achiever, we are inclined to believe that the goals related to tourism and infrastructure
have a higher chance of being reached than during Aquino’s era. We are going to see more
clearly in 2017 how Duterte’s leadership will shape the country’s growth drivers.
Million tourists
Tourism goals in the Philippines 2016-2022
20
18
16
14
12
10
8
6
4
2
0
18
16
14
12
10
8
5.4
6
5.4
6
2015
2016
10
12
7
9
11
8
2017
2018
2019
2020
2021
2022
Current goal
Investment cycle has in the past five years been mostly private driven. Now public sector has also
started to participate, which means more growth ahead. Source: CLSA
JOM Fund Management Ltd
Salomonkatu 17 B, 00100 Helsinki, FINLAND
Tel: +358 9 670 115, Fax: +358 9 670 117
info @jom.fi www.jom.fi
Source: DoT (Department of Tourism), CLSA
Possible new goal