FSA asked Darius McDermott to select two strong performing Asia ex-Japan equity strategies. He chose the Federated Hermes Asia ex-Japan Equity fund and Man Asia (ex Japan) Equity fund. According to McDermott, Federated Hermes Asia ex-Japan Equity fund is a concentrated fund investing in emerging markets within the Asia ex-Japan region. “Lead manager Jonathan Pines…
FSA asked Darius McDermott to select two strong performing Asia ex-Japan equity strategies. He chose the Federated Hermes Asia ex-Japan Equity fund and Man Asia (ex Japan) Equity fund. According to McDermott, Federated Hermes Asia ex-Japan Equity fund is a concentrated fund investing in emerging markets within the Asia ex-Japan region. “Lead manager Jonathan Pines…
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FSA asked Darius McDermott to select two strong performing Asia ex-Japan equity strategies. He chose the Federated Hermes Asia ex-Japan Equity fund and Man Asia (ex Japan) Equity fund. According to McDermott, Federated Hermes Asia ex-Japan Equity fund is a concentrated fund investing in emerging markets within the Asia ex-Japan region. “Lead manager Jonathan Pines…
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FSA asked Darius McDermott to select two strong performing Asia ex-Japan equity strategies. He chose the Federated Hermes Asia ex-Japan Equity fund and Man Asia (ex Japan) Equity fund. According to McDermott, Federated Hermes Asia ex-Japan Equity fund is a concentrated fund investing in emerging markets within the Asia ex-Japan region. “Lead manager Jonathan Pines…
FSA asked Darius McDermott to select two strong performing Asia ex-Japan equity strategies. He chose the Federated Hermes Asia ex-Japan Equity fund and Man Asia (ex Japan) Equity fund. According to McDermott, Federated Hermes Asia ex-Japan Equity fund is a concentrated fund investing in emerging markets within the Asia ex-Japan region. “Lead manager Jonathan Pines…
FSA asked Darius McDermott to select two strong performing Asia ex-Japan equity strategies. He chose the Federated Hermes Asia ex-Japan Equity fund and Man Asia (ex Japan) Equity fund. According to McDermott, Federated Hermes Asia ex-Japan Equity fund is a concentrated fund investing in emerging markets within the Asia ex-Japan region. “Lead manager Jonathan Pines…
FSA asked Darius McDermott to select two strong performing Asia ex-Japan equity strategies. He chose the Federated Hermes Asia ex-Japan Equity fund and Man Asia (ex Japan) Equity fund. According to McDermott, Federated Hermes Asia ex-Japan Equity fund is a concentrated fund investing in emerging markets within the Asia ex-Japan region. “Lead manager Jonathan Pines…
FSA asked Darius McDermott to select two strong performing Asia ex-Japan equity strategies. He chose the Federated Hermes Asia ex-Japan Equity fund and Man Asia (ex Japan) Equity fund. According to McDermott, Federated Hermes Asia ex-Japan Equity fund is a concentrated fund investing in emerging markets within the Asia ex-Japan region. “Lead manager Jonathan Pines…
FSA asked Darius McDermott to select two strong performing Asia ex-Japan equity strategies. He chose the Federated Hermes Asia ex-Japan Equity fund and Man Asia (ex Japan) Equity fund.
According to McDermott, Federated Hermes Asia ex-Japan Equity fund is a concentrated fund investing in emerging markets within the Asia ex-Japan region. “Lead manager Jonathan Pines is willing to buy all types of companies if the price is right. He actively invests in stocks that are currently out of favour but which he believes are likely to perform better in the future,” he said.
Man Asia (ex Japan) Equity also has a concentrated portfolio which can invest in Asian companies of all sizes. “The team look to capture the turning points in earnings revisions where there has historically been significant potential to generate alpha,” said McDermott. The strategy uses a combination of top-down and bottom-up concentrated risk taking, with the stated objective of alpha or excess return through the economic cycle.
Investment approach
Federated Hermes
Man Group
Size
$6.37bn
$1.97bn
Inception
2012
2020
Managers
Jonathan Pines, Sandy Pei
Andrew Swan
Three-year cumulative return
72.76%
76.92%
Three-year annualised return
20.89%
21.81%
Three-year annualised alpha
2.34%
2.53%
Three-year annualised volatility
17.63%
18.52%
Three-year information ratio
0.36
0.69
FE Crown fund rating
****
–
OCF
1.61%
1.96%
Source: FE fundinfo and fund factsheets. Data in US dollars to 17 July 2026
“The investment philosophy of Federated Hermes Asia ex-Japan Equity fund is to be contrarian, and Pine typically likes to go against the grain, often buying stocks which have underperformed,” McDermott said. The fund has no defined style bias, and the manager will invest in any companies that are attractively priced relative to the quality of the underlying business.
“Pine also prioritises those where the potential for gains is greater than the risk of losses,” he added.
The fund is limited to a maximum overweight or underweight of 20% relative to the index for countries and sectors. “In practice, this is a very loose constraint which has little impact. The fund’s emphasis on valuation has historically led to an underweight to India and an overweight to cheaper markets such as South Korea and China,” McDermott noted.
The core of the Man Asia (ex Japan) fund’s investment philosophy is based around relative earnings revisions. Indeed, there is strong evidence to suggest earnings revisions have been one of the top-performing factors in the broader performance of Asian equities.
“Therefore, the team focuses on capturing turning points in companies that have high earnings per share revision potential over the next 12 to 18 months,” said McDermott.
The team complement their bottom-up analysis with top-down macro analysis. Asian markets and currencies can be volatile.
“This analysis can help explain how different countries, industries and styles will perform. It helps the team adjust the portfolio to deliver on their investment objective of generating alpha. The fund will be tilted towards the countries, industries and styles the team most favour,” McDermott said.
While both strategies have flexibility in terms of style, McDermott argues that the Federated Hermes fund has more of a contrarian value/price-to-quality focus, while the Man fund is more of a growth-at-a-reasonable-price style – with a focus on sustainable earnings growth and strong business franchises.
Both funds have exposure to the booming Korean market, and there are some crossover in holdings with names like TSMC, Samsung Electronics and Tencent in both top 10 holdings, but there are also clear differences as well.
For example, the Man fund has a greater exposure to technology, “reflecting a growthier style”. In contrast, the Federated Hermes fund has greater exposure to sectors such as consumer discretionary and staples.
The valuation focus of the Federated Hermes strategy is also highlighted by the fact it has little or no exposure to India, compared with 12.1% for the Man fund. In contrast, the Federated Hermes fund has more exposure to China (38.4% versus 25.0%).
The Man fund is the also more concentrated of the two, with about half the number of holdings of the Federated Hermes strategy.
Fund characteristics
Sector allocation:
Federated Hermes
weighting
Man Group
weighting
IT
26.1%
IT
43.7%
Consumer discretionary
17.1%
Financials
18.0%
Financials
15.1%
Industrials
14.0%
Communication services
11.3%
Consumer discretionary
8.1%
Consumer staples
10.7%
Communication services
7.5%
Industrials
10.5%
Materials
3.5%
Materials
5.5%
Healthcare
3.4%
Real estate
2.5%
Energy
0.9%
Source: Fund factsheets, 30 June 2026
Country allocation:
Federated Hermes
weighting
Man Group
weighting
China
38.4%
Taiwan
29.2%
Korea
28.9%
China
25.0%
Taiwan
12.8%
Korea
24.4%
Thailand
8.8%
India
12.3%
Hong Kong
3.0%
Philippines
2.6%
Japan
2.6%
Hong Kong
1.7%
Switzerland
2.1%
Indonesia
1.6%
Indonesia
1.4%
Australia
1.5%
Philippines
1.1%
US
0.7%
Source: Fund factsheets, 30 June 2026
Top 10 Holdings:
Federated Hermes
weighting
Man Group
weighting
TSMC
9.9%
TSMC
9.4%
Samsung Electronics
9.6%
SK Hynix
9.3%
Tencent
7.1%
Samsung Electronics
9.2%
Samsung Life Insurance
4.3%
Tencent
5.0%
Samsung Fire & Marine
3.8%
ASE Industrial
3.7%
AAC Technologies
3.6%
Alibaba
3.3%
CP All
3.5%
Delta Electronics
3.3%
JD.Com
3.2%
Hon Hai Precision
2.9%
Contemporary Amporex Technology
3.1%
ICICI Bank
28%
Bangkok Bank
2.8%
Taishin Financial
2.7%
Source: Fund factsheets, 30 June 2026
Performance
“One would probably expect the Man fund to perform better in a technology, AI-led and growth market, while the Federated Hermes fund should excel when there are recoveries in China, banking, property and other previously depressed sectors,” McDermott said.
Over five years both strategies have performed “reasonably well”. Man Asia (ex Japan) Equity and Federated Hermes Asia ex-Japan Equity both had their worst year in 2022, while both also had strong years in 2025.
The Federated Hermes fund has generated a three-year cumulative return of 72.6% with annualised volatility of 17.63%. The Man strategy has achieved 76.92% during the same period, with annualised volatility of 18.52%, according to FE fundinfo.
The Man Asia (ex Japan) fund has outperformed year-to-date (20 July 2026), up 18.16%, compared with the Federated Hermes Asia ex-Japan Equity fund, which is up 14.15, FE fundinfo date shows.
Manager review
“Both strategies have strong teams in this region,” said McDermott.
Jonathan Pines is a highly experienced manager and has spent well over a decade working on this fund. He joined the firm in March 2009 as a portfolio manager for the Asia ex-Japan strategy, becoming its lead manager in early 2010. Before this, he was a fund manager at RAB Capital and an analyst at Orbis Investment Advisory in London. Originally from South Africa, Pines was a partner at PKF Johannesburg. He holds an MBA from Harvard Business School, is a CFA charterholder, and a chartered accountant.
Andrew Swan is head of Asian equities at Man Group and is based in Australia. Swan began his career as a research analyst at Ord Minnett Securities in 1994. He was a portfolio manager at JP Morgan between 2005 and 2011 before he joined BlackRock as head of fundamental Asian equities and head of fundamental Emerging Markets. He joined Man Group in August 2020. Swan holds a Bachelor of Commerce from the University of New South Wales.
Fees
According to Morningstar studies, fees are the best predictor of a fund’s future success, and an investor should select the cheaper fund, all else being equal.
The on-going charges figure (OCF) for the Federated Hermes fund share class available to Asian retail investors is 1.6% and the OCF is slightly higher for the Man fund at 1.96%, according to FE fundinfo.
Conclusion
McDermott likes both funds. “They are high conviction and have a style tilt which means they can complement one another,” he said.
“We like the Man fund’s conviction and flexibility. The portfolio also strikes the right balance between manager freedom and risk control. The process of focusing on relative earnings revisions has proven to be successful since launch. Many investors will gravitate towards the growth focus, particularly as technology flourishes in the region.”
“However, the contrarian philosophy of the Federated Hermes fund makes it refreshingly different to many of its peers,” McDermott said. “The process has historically worked very well, with the fund delivering excellent long-term performance and an ability to offer cover when markets shift.”
The world’s largest asset manager saw $192bn of net inflows in the second quarter of 2026, driven by ETFs, private markets, and systematic equity strategies.
Facts Only
* Darius McDermott selected the Federated Hermes Asia ex-Japan Equity fund and Man Asia (ex Japan) Equity fund.
* The Federated Hermes fund is a concentrated fund investing in emerging markets within the Asia ex-Japan region.
* Federated Hermes Fund manager is Jonathan Pines.
* Man Asia (ex Japan) fund focuses on capturing turning points in earnings revisions.
* Federated Hermes Fund investment philosophy is contrarian, focusing on attractive pricing relative to quality and prioritizing potential gains over risk of loss.
* Man Asia fund uses a combination of top-down and bottom-up analysis for portfolio adjustment based on economic cycles.
* The Federated Hermes fund has a maximum overweight/underweight constraint of 20% relative to the index for countries and sectors.
* Federated Hermes fund historically shows an underweight to India and an overweight to South Korea and China.
* Man Asia fund focuses on companies with high earnings per share revision potential over the next 12 to 18 months.
* Inception dates are 2012 for Federated Hermes and 2020 for Man Asia.
* Federated Hermes three-year cumulative return is 72.6% with an annualized volatility of 17.63%.
* Man Asia (ex Japan) fund three-year cumulative return is 76.92% with an annualized volatility of 18.52%.
* The Man Asia fund outperformed the Federated Hermes fund year-to-date, up 18.16% versus 14.15.
Executive Summary
Darius McDermott was asked to select two strong performing Asia ex-Japan equity strategies, choosing the Federated Hermes Asia ex-Japan Equity fund and the Man Asia (ex Japan) Equity fund. The Federated Hermes fund is described as a concentrated fund investing in emerging markets within the Asia ex-Japan region, managed by Jonathan Pines. The Man Asia fund focuses on capturing turning points in earnings revisions using a combination of top-down and bottom-up analysis to generate alpha through economic cycles.
The investment philosophies differ: the Federated Hermes fund emphasizes a contrarian value/price-to-quality focus, while the Man fund leans towards a growth-at-a-reasonable-price style focusing on sustainable earnings growth. While both strategies have exposure to technology leaders like TSMC and Samsung Electronics, the Man fund has greater exposure to technology, and the Federated Hermes fund focuses more on consumer discretionary and staples. Furthermore, in terms of country allocation, the Federated Hermes fund has less exposure to India but more to China, whereas the Man fund has a larger allocation to India. Performance data shows that the Man Asia fund achieved a three-year cumulative return of 76.92% with an annualized return of 21.81%, compared to the Federated Hermes fund's 72.76%.
Full Take
The comparison between the two strategies highlights a tension between contrarian value investing and growth-at-a-reasonable-price strategies within the Asia ex-Japan context. The divergence in portfolio construction—Federated Hermes emphasizing valuation and contrarian positioning versus Man Group focusing on earnings revision momentum—suggests that success is highly dependent on correctly identifying shifting market dynamics rather than adherence to a singular style. The fact that both strategies successfully navigate cycles, evidenced by their performance during the 2022 downturn and subsequent strong years in 2025, suggests a robust underlying methodology for risk-adjusted compounding.
A key pattern emerging is the functional complementarity derived from differing philosophies: one strategy seeks to exploit mispricing (Federated Hermes), while the other seeks to capitalize on realized potential shifts (Man Asia). This separation allows investors to hedge against style drift, as demonstrated by their different sector and geography tilts, despite significant overlap in high-growth technology holdings. The influence of macroeconomic timing remains central, as articulated by the need for top-down analysis in the Man fund's approach.
The structure of the data itself is illuminating: the divergence in concentration (Man Asia having fewer holdings) reinforces the difference between a focused momentum play and a broader value screen. The subtle differences in fee structures, while relatively small, feed into the overall cost of achieving alpha. The narrative implicitly suggests that consistent performance over long cycles relies less on identifying a single 'best' investment style and more on deploying flexible analytical tools to capture various turning points across different market regimes. This underscores the principle that disciplined conviction allows for stylistic flexibility in pursuit of cycle-dependent returns.
Bridge Questions: How would portfolio allocation change if an investor strictly prioritized minimizing volatility over maximizing absolute return? What are the forward-looking earnings revision catalysts expected in specific Asian markets over the next 18 months, and how do these differ between the growth-focused and value-focused strategies? What measurable impact does the difference in OCF translate to long-term realized performance adjustments for retail investors?
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