Rose Choy, who is currently managing the PCIIM Emerging Markets
Bond Fund, has five years of experience in the fixed income
field. Prior to PCIIM, Choy's past experience was in the high
yield and distressed debt fields at Citigroup in New York
and with Carl Marks, a distressed debt fund based in New York.
Interview with Rose Choy
- Can you first give us a brief outline on the key individuals
at PCI Investment Management Limited?
Herman Fung is the managing director of PCIIM. Fung
has over 20 years of experience in the financial services
industry, including nine years with Wardley Investment
Services (HK) Limited (now HSBC Asset Management Limited)
where he was executive director and head of fixed income
department in London and Hong Kong offices. Thereafter,
Fung spent seven years with Goldman Sachs (Asia) LLC as
executive director of fixed income. Prior to joining Wardley
Investment Services in 1979, he worked for W.I. Carr Sons
& Company responsible for Hong Kong equity research
Walter Wu is the executive director of PCIIM. Wu began
his investment management career in London at Gartmore
Investment Management Limited and subsequently joined
Midland Montagu Asset Management Limited where he was
responsible for investment trusts and pension fund management
in Far Eastern equities. In 1991, he returned to Hong
Kong and became investment director for BZW Investment
Management Limited. Wu became an independent fund manager
in 1993, during which he transformed AsiaInvest Consultants
Limited to become a fund management company providing
investment management services on Asian equities for institutional
investors. Prior to establishing PCIIM, Wu founded AR
Asset Management (HK) Limited specialising on absolute
return investment mandates in Asia.
- You launched in January this year. How has Q1 been
With the 1st quarter not quite over yet, the PCIIM Emerging
Markets Bond Fund has delivered a year-to-date return
(as of March 17) of 3%. Emerging markets as an asset class
have been performing well this year although not without
its volatility. From the end of January throughout February,
the market was relatively volatile as market participants
reacted to the January FOMC meeting and political scandals
Which markets have you found the best returns and
what has been your regional exposure so far?
We find Asia and Eastern Europe to have good risk-adjusted
returns this year. Our exposure to Asian bonds and Eastern
European bonds are about 50% and 40% respectively.
- Global interest rates are starting to rise and it
looks like the Fed will increase interest rates on the US
dollar. What is your outlook on this and how will it affect
the performance of your fund?
We believe that interest rates will have to rise eventually.
However, as the employment picture in the US is still
rather sluggish and inflation remains subdued, we do believe
that the Federal Reserve will truly be patient in raising
rates this year. Apparently, when interest rates do rise,
global liquidity will eventually dampen and the markets
can become even more volatile. However, we have the ability
to hedge against interest rate risks and credit risks
in our fund, so we are prepared for a rise in yields.
- Can you give a rough breakdown of the maturity spreads
of the debt instruments that you hold as of now?
About 60% of our portfolio has duration of less than
seven years and the remainder has duration of over ten
Is there a master/feeder arrangement between this
fund and the global fixed income fund or are they managed
No, there is no master/feeder arrangement between the
two funds. They are managed separately.
- Do you employ automatic stop-losses and if so what
are they? What other risk management measures do you implement
to avoid large drawdowns?
No, we do not have automatic stop-losses. However, we
have an in-house risk management system to monitor our
portfolio. If needed, we can use interest rate or credit
derivatives to hedge our portfolios in order to minimise
- And lastly what is your capacity and how are you intending
to attract investors in 2004?
We don't plan to soft close the fund.
Rose Choy, Senior Investment Analyst
+852 2918 2101