Best Fund Manager
is no secret, you choose the right sector and the right stock"
Chaplain Asiaweek Pictures.
"Fundamentals come first but you have to be a
momentum player too," says Peter Chau.
Tell us your secret, Peter Chau. The Hong Kong fund manager is on
a roll. Two awards from Lipper Analytical Services in 1990 for the
best-performing currency fund and international bond fund. Top honors
from Standard & Poor's Fund Services in 1991, 1992 and 1993 for
best performance by a warrants fund. In 1999, Manager of the Year
in the Greater China equity sector. And now, Asiaweek's Best Fund
Manager for his stewardship of the CIBC PCF Hong Kong Plus Fund,
by far the hottest performer among 280 unit trusts authorized for
sale in Hong Kong, Malaysia, Singapore or Taiwan.
"There is no secret," says Chau, 43, who is deputy managing director
at TAL CEF Global Asset Management in Hong Kong. "You choose the
right sector and the right stock." He knows how to pick them. Last
year, Hong Kong Plus bought into tiny telecom supplier Tricom at
about HK$0.30 per share. Richard Li, a son of billionaire Li Ka-shing,
had bought the company as a vehicle for his technology ventures.
Renamed Pacific Century Cyber Works (PCCW), it began defying gravity,
reaching HK$28 a gain of 9,200% for Chau when Richard
Li won a bid for Cable & Wireless HKT, Hong Kong's dominant phone
A disclosure here: TAL CEF is partly owned by Li Ka-shing's Cheung
Kong group. Some in Hong Kong saw Chau's Tricom purchase as a way
of helping out Li's son. "Not too many people believed it would
work," concedes Chau. "We were 60% sure, not 100%. But that's investment.
You take risks." Hong Kong Plus also has Cheung Kong and another
Li Ka-shing blue chip, Hutchison Whampoa, as core holdings. But
Chau does not blindly hold on to these shares. He has sold all his
PCCW stock at around HK$20.
Chau also took profits in Tom.com, a Li Ka-shing Internet portal,
and other tech shares. "We have gone back to Old Economy stocks,"
he says. Red chips and H-shares, which are Hong Kong-listed companies
with major operations in China, now make up more than 34% of his
"Fundamentals come first, but we have to be a momentum player too,"
says Chau. Translation: Hong Kong Plus will be on the lookout for
stocks it can ride for short-term capital appreciation. This approach
does not necessarily cause wild price swings. Standard & Poor's
has awarded Hong Kong Plus five stars meaning it has demonstrated
consistent gains and low volatility in the past 36 months.
By Cesar Bacani
Write to Asiaweek at email@example.com