How has coronavirus affected your day-to-day work (from a portfolio and workplace perspective)?
My day-to-day work life hasn’t really changed. We’ve adopted split working in our Hong Kong office, where I’m based, which means that 50% of the team are in the office and 50% work from home on a rotating basis. The transition to video and conference calls, both internally and externally was, thankfully, a seamless process. In terms of our portfolio, we remain dedicated to our process which is all about finding and selecting long-term winners based on strong fundamentals, so we’ve not made any material changes in light of the volatile market conditions.
How are you getting to grips with the epidemiology of coronavirus?
Clearly there’s a lot of debate, particularly among epidemiologists and scientists, regarding the virus. While we’re cognisant of the debate we don’t get distracted by it and instead remain focused on company fundamentals. We run a really disciplined investment process.
How have you changed the portfolio in recent weeks as the crisis escalated?
We’ve taken the opportunity to add to some winners in Asia ex Japan. These are the companies we believe are exposed to the long-term structural changes driving Asia’s dynamic growth. And we’ve reduced our allocation to banks, where we believe the outlook is more difficult in the context of the challenging macro environment.
Do you have any behavioural mechanisms in place for navigating the market volatility?
Our process has an inbuilt long-term investment horizon. We prefer to invest in quality stocks, long-term secular growth names and our valuation framework is also long term (five years). This explains why our portfolio turnover hasn’t seen significant spikes during this period.
What has surprised you most about markets during the coronavirus sell off?
First surprise was the market rebound. As of 29 April, the Asia ex-Japan is back to 1.4 times price to book. Second surprise has been the massive performance divergence between the winners and the losers. Growth stocks have continued to outperform value and the value spread has become even more extended.
What are the most important points you want to hear from your holdings at the moment?
Balance sheet strength, ability to provide guidance, ability to pay dividends.
How do you find working remotely during volatile markets?
Thanks to the technology and connectivity at our disposal, we’ve been able to retain a sense of ‘business as usual’. We have a geographically diverse team, so constant communication via video chats and conference calls is perfectly normal for us.
How does this compare to other market sell offs that you’ve managed money through?
It’s very difficult to compare this sell off to any others. No one is to blame for this particular downturn. The moral hazards which characterised the global financial crisis doesn’t apply here. Plus we’ve seen how governments have unleashed unprecedented fiscal and monetary stimulus and interventions like never before.
It feels like this time round the victim is going to be the High Street: retailers, service industries and tourism.
What do you do for fun when you take a break from working at home?
I enjoy going for short hikes with my three year-old daughter – Hong Kong is renowned for its hiking trails. My daughter loves to watch the Peak Tram go up and down. Definitely not as entertaining for me but thankful to get a breather from the home environment.
What is your favourite snack when working from home?
Ice cream. Totally lost track of how many tubs I’ve eaten since the start of this pandemic.
Do you have a ‘top tip’ to share on working remotely?
Kids and work video calls feels like a crazy balancing act at times. Do whatever it takes to keep your child away from your work keyboard. My daughter’s probably eaten just as much ice cream as me and no doubt loving the enticement.
