But it seems you don’t need to be in Kwok’s fund for the long haul to reap the benefits. Over the past year, the fund has returned 48.17%, versus the benchmark’s 31.70%, see graphs.
These strong numbers in part owe something to Kwok’s preference for technology and financials stocks.
‘Given the quality growth bias nature of the fund, it is natural that we find more opportunities in these two sectors, as well as the consumer space,’ she says.
At present, Kwok has 32.5% allocated to financials, 31.4% to information technology, 19% to consumer discretionary and 4.7% to consumer staples.
In the technology sector, Kwok says she holds names that have been able to benefit from the world’s increasing demand for these businesses.
‘We hold hardware firms such as Samsung Electronics, which has benefited from the extended memory upcycle, and Largan Precision, which has taken advantage of smartphone upgrades.
'As well as this, we hold positions in internet names and gaming and ecommerce giants, which have done well from current secular trends.
‘For financials, Chinese insurance companies like Ping An Insurance (5.1%) and Indian private sector banks like HDFC Bank (2.6%) are two areas which really stood out and we have a long-term positive outlook here.
'We look at the underlying economics of the companies, the returns they generate, the duration of the business and its ability to sustain this return, as well as the governance side,’ she says.
Monitoring the underlying economics of companies seems to be a process that Kwok has used throughout her career.
Her other tips for becoming an outperformer include keeping things simple as well as filtering out the noise, which she adheres to strongly when it comes to politics.
South Korea is a case in point. Despite the political tension with its northern neighbour, Kwok could see the case for selective investments. She has since made a profit on these and her current underweight holding in the country doesn’t tell the whole story.
‘Politics plays a little part but does not prevent me from investing in Korea if we find companies with good fundamentals there. We have a pure bottom-up stock selection process and the overweight or underweight is a by-product of this approach.
‘Sometimes the uneven political landscape may present investment opportunities, as stocks get sold down too aggressively by investors.
'We have taken quite a bit of profit in Korea this year, in particular in the technology sector with SK Hynix, due to its significant outperformance, hence our underweight there currently.’
This article originally appeared in full in the February edition of the Citywire Selector magazine.