Mobius still betting on Thai investments even after first largest drop in 14 years- report

January 14
4:03 AM 2014

Mark Mobius is still betting heavily in Thai commodities and energy stocks this year even if these were the same investments that led to the biggest decline of his $14 billion Templeton Asia fund in 14 years, Reuters reported.

Last year, investors withdrew around $500 million from his Asia fund. The report said this was the biggest recorded outflows by fund tracker Lipper since it began gathering data for the biggest equity fund in Asia in 2003.

Compared to the 3.33% increase in the MSCI AC Asian ex-Japan index, Templeton Asia fund declined 7.8% in 2013. Data revealed that this was the second year in a row when the fund underperformed. Its peers, meanwhile, gained 2.4% on the average, the report said.

Still the emerging markets fund manager is committed to the Thai economy, saying that its resilience to past crises had made him a believer. Templeton Emerging Markets Group Executive Chairman Mobius told Reuters, "We stick to our guns very often."

Citing figures from Lipper, the report said the political crisis in the country was part of the reason why foreign investors withdraw over $750 million from offshore Thai equity funds in the past five months. In a move that reversed the inflows from the year before, investors pulled out net $376 million last year, the report said.

Often thought of as an emerging markets authority, Mobius employs contrarian "value investing" where he would purchase stocks that have run out of favor. The strategy has allowed him to post returns reaching almost 200% for his Asia fund in the past decade. The fund is considered one of the best in the industry, the report said.

However, Reuters reported that the same strategy boomeranged in 2013, mainly due to the political turmoil that had gripped Thailand and of China's lessening enthusiasm for commodities.

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