Top equity fund in June spies fresh Thai gains

LONDON (Reuters) - Thai equity portfolios dominated performance tables for British-registered funds in June, and the manager delivering the very best returns is convinced the road back from political unrest will offer more opportunities.

Stuart Winchester's dollar-denominated Allianz RCM Thailand fund came out on top of more than 3,000 equities funds registered for sale in Britain, according to data from Thomson Reuters fund research firm Lipper.

His fund was up 15.9 percent in June, and is up 62 percent on a 12-month view, placing it at 15th in the rankings, despite recent months marked by violent protest on the streets of Bangkok which rocked sentiment.

"We have tilted the portfolio to our strongest conviction names in Thailand. Stocks that we have continued to hold rallied on the back of a stabilising political environment and cheap valuations," Winchester said.

"Our over-weight position in the industrial space helped, while an under-weight energy strategy was beneficial for the fund too," he told Reuters via email.

His fund had a 12.9 percent allocation to industrials going into June, against 5.4 percent on the benchmark, while energy was a massive underweight, at just 2.1 percent in the portfolio compared to 27.4 percent on the benchmark.

Winchester's was one of a host of Thailand-focussed funds at the top of the rankings for June.

Timothy Teo's Amundi Funds Thailand delivered returns of 8.2 percent, while Anthony Srom at Fidelity saw his Thai equity portfolio gain 7.8 percent in a month when the average equity fund was down 2.7 percent, Lipper data showed.

MANEK STARS AGAIN

Other outperformers were Fidelity's $750 million (496.5 million pound) Indonesia fund and Manek Growth, the British-focussed fund run by a former pharmacist and fund management competition winner which topped the rankings in May.

U.S. equity funds, meanwhile, had a torrid month as the market suffered a second straight month of declines. For a full table of leaders and laggards among British-registered equity funds in June.

Winchester, Teo and Srom all outperformed the Thai stock market .SETI, which was up 6.3 percent in June. The average return from funds in the Lipper Global Thai equities benchmark was a little shy of that at around 6 percent.

On Tuesday, Thailand extended a state of emergency imposed in about a third of the country during recent bloody political protests, saying anti-government elements continued to pose a threat.

The protests, mainly involving supporters of an ousted prime minister, turned violent in April and May. Some 90 people were killed and almost 2,000 wounded, raising fears for stability in southeast Asia's second-biggest economy.

"Thailand from a valuation perspective remains attractive, and the political unrest has thrown up opportunities for stock pickers... Thailand is not over owned by investors which should provide some support to the market," said Winchester, although he struck a note of caution.

"Volatility could come back, particular if the Red shirts are able to regroup. A little disappointing was the lack of conciliatory engagement for the Red shirts since the protest ended."

Winchester said he will maintain a focus on longer-term themes like infrastructure. "Other sectors of focus are in rural and agriculture, which will continue to see government support," he said.

His top holdings going into June included TISCO Financial TISCO.BK, PTT Chemical PTTC.BK and Indorama Ventures IVL.BK.

(Editing by Dan Lalor)