Manager Monitor: Chuk Wong, 1832 Asset Management LP

Investors tend to identify emerging markets solely with China, says Wong, although it accounts for about 30% of emerging markets in aggregate. “No one equates the global economy with the U.S.,” he adds. “But people equate emerging markets with China. That’s not right. These markets do not move in tandem.”

Moreover, even if the direction of China’s economy is uncertain, Wong argues that the worst appears to be over. “There are some signs of stabilization,” he says, noting that the Purchasing Managers’ Index is back in positive territory. “If the economy continues to be weak, there will be more fiscal stimuli. Like other countries, China will respond with policy initiatives. The downside is quite limited from here.”

While U.S. equity markets have roared ahead, Wong has become cautious and lowered the weighting in the Morningstar 3-star-rated Dynamic Global Value to about 16%, versus 28% a year ago. “The U.S. market is not cheap by historical standards. It’s in the seventh inning, to use an analogy,” he says.

For Wong, who is responsible for managing about $1.5 billion, there’s better value in Europe and the emerging markets. The former accounts for about 35% of the fund, while emerging markets represent 26% of the portfolio, compared with 13% in the MSCI All Country World Index.

One representative European holding is Greece’s Alpha Bank SA, which Wong acquired last year. “When you look at an economy in crisis, the best time to buy is when the balance sheet has been recapitalized and when profitability before provisioning is on the turn,” he says, adding that the stock is trading below book value. The other factor is that since the Greek banking industry has undergone a significant consolidation, Alpha Bank has emerged as a leading player.

“Once things stabilize, and the Greek economy improves,” says Wong, “the banking sector will be a great place to be.” At 2.8% of the fund, Alpha is one of the largest holdings in a 60-name portfolio. Wong is generally a buy-and-hold investor, as illustrated by last year’s low portfolio turnover of 21.2%.

A Hong Kong native, Wong earned a bachelor of business administration in 1984 from the Chinese University of Hong Kong, After graduating, he was hired as a loans-syndication officer at Bank of East Asia. Two years later, he moved to Vancouver and enrolled in the MSc in business administration program at University of British Columbia. Upon graduating in 1989, he became a sales associate at Daiwa Securities Canada Ltd.

In 1991, Wong went back to Hong Kong, in order to apply for Canadian landed-immigrant status, and rejoined Bank of East Asia as an analyst covering Hong Kong-listed stocks and managing U.S. investments for the bank. In 1993, he returned to Canada and was hired as an investment-performance analyst at Gluskin Sheff & Associates Inc. In 1996, he moved to Goodman & Co. Investment Counsel Ltd., (which was renamed 1832 Asset Management in November of last year), as a securities analyst covering Far East stocks.

Later in 1996, Wong assumed responsibility for Dynamic Far East Value, a Morningstar 4-star fund. He has one of the longest manager track records in the Asia Pacific Equity category.

Over the past 12 months ended in July, the fund was in the second quartile. That is attributable to Wong avoiding Japan, a market that performed very well in 2013. “I’m still underweight Japan,” he says. “I stick to my discipline — be contrarian and look for value. My strategy does not work every quarter. But in the long run, the funds are in good shape.”