Mirae broadens Australian reach for Asian equities

Mirae Asset Global Investors has launched its India Sector Leaders strategy in Australia for institutional investors and is about to widen its reach for its Asia Sector Leaders fund with a unit trust offering.

The firm’s third Australian product since it opened an office in Sydney in 2015 is a concentrated thematic strategy known as Asia Great Consumer, which already has a trust under the Equity Trustees RE umbrella.

Chris Wildman, who runs the Australian distribution, said the Asia Sector Leaders fund was “ready to go” and he expected it to be seeded within a couple of months.

His co-CIO, Hong Kong-based Rahul Chadha was in Australia last week promoting the new India-only strategy and also talking about the other broader funds, each of which are concentrated portfolios.

Chadha says that Mirae is bullish on India versus other parts of Asia at the moment because of the structural changes underway with the government of prime minister Narendra Modi.

“He’s making a big difference with the country’s institutional framework… In its government-to-business relations there is more transparency. The rules of the game have changed.”

Chadha estimates that it will take Modi, who was elected in 2014, about five years to introduce all his proposed reforms.

“Politicians now realize they can win elections off the back of development and new infrastructure projects. People vote for development,” he says. “India is where China was 10 years ago.”

With its flagship Asia Sector Leaders fund, India represents 25 per cent compared with the index’s 8 per cent. But Mirae has also recently increased its China exposure, from 33 per cent to 43 per cent, following its assessment that there had been a reduction in tail risk. Roughly one third of the Asia Sector Leaders fund has common stocks with the Asia Great Consumer fund.

Chadha says that in Asia the case for active management is stronger than in more developed countries. “If you buy an Asian ETF you are buying a lot of junk too,” he says. “An ETF represents the success stories of the past.”