28/05/2019 - Funds: DJE - Asia High Dividend
High dividends, low volatility
With DJE - Asia High Dividend, investors can selectively expand their portfolio with equities from the Asian growth region.
Text: Claudia Lindenberg. Published in „Das Investment Extra“, June 2019
Dividend stocks are particularly popular among many investors therefore classics such as Nestlé are represented in many portfolios. But it is also worth taking a look at Asian equities. In general, in addition to traditionally higher dividend payments - which reinforce the compound interest effect of reinvested dividends - the low level of corporate debt also speaks in favour of investing in high-dividend Asian companies:
"This is due on one hand to the high proportion of family-run companies and on the other to the often significantly higher interest rates that had to be paid in the past. It is therefore not uncommon for even companies in sectors with usually high leverage to hold net cash," explains Vice-Chairman Jan Ehrhardt of the DJE Executive Board. The manager of DJE - Asia High Dividend, who also manages the two flagship funds DJE - Zins & Dividende and DJE - Dividende & Substanz, adds that these companies are better positioned when critical market phases arise.
With this fund Ehrhardt is implementing the company's dividend strategy primarily outside Japan. "With a medium-to long-term investment horizon we are focusing on fundamentally favourable equities with above-average dividend yields that allow us to expect that the dividend will make a high and reliable contribution to the overall performance of the fund," he outlines the investment approach. Ehrhardt mainly manages risk via the cash ratio which is currently 3.5 percent.
The fund manager is taking full advantage of this: in comparison to the MSCI AC Far East ex Japan, for example, he is weighting Hong Kong significantly above with more than a third of the portfolio while China, on the other hand is clearly underweight.
The fact that Hong Kong plays a dominant role in the fund with more than 34 percent is also a result of the sectorial orientation: "The tourism and real estate sectors generally play an important role in the fund whereby we focus on selected real estate equities whose most important assets are located in Hong Kong Central and which generate the lion's share of income through portfolio rents," explains Ehrhardt, who actually weights this investment segment in the fund approximately 14 percent.
The fund manager explains that the leisure and travel sectors also play a dominant role with the structural growth of the Asian - especially the Chinese - tourism industry. "The growing middle class in Asia should continue to support growth rates in the coming years," says Ehrhardt who currently focuses on this segment. Another argument in favour of the sector is that it is not too highly valued in historical terms.
Note: All information published is for your information only and does not constitute investment advice or other recommendation. Long-term experience and awards do not guarantee investment success. Securities are subject to market-related price fluctuations which may not be compensated for by the active management of the asset manager or investment advisor. This information cannot replace a personal consultation. All information has been provided with care and to the best of our knowledge at the time of preparation. Despite all due care the data may have changed in the meantime. Further information on opportunities and risks can be found on the website www.dje.de. The sales prospectus and further information are available free of charge in German from DJE Investment S.A. or at www.dje.de The fund management company is DJE Investment S.A. DJE Kapital AG is the distribution agent.