* Says hard to find value among Asian stocks
* Favours Singapore's OCBC, UOB, HK's Swire Pacific
* Says trading, timing markets don't work in long-term
For more stories on Asia fund inflows [ID:nTP126890]
By Kevin Lim
SINGAPORE, May 7 (Reuters) - Fund manager Hugh Young entered the financial industry in the 1980s knowing next to nothing about stocks.
More than two decades later, and with $38 billion in assets under his wing, the managing director of UK money manager Aberdeen Asset Management's <ADN.L> Asia business still insists he is "not clever enough", and therefore does not invest in anything he doesn't understand.
That stance is making Young, 50, cautious about the recent surge in Asian stocks, especially China's.
"The rally goes against the prevailing economic climate," he said, warning it won't be sustainable as the global economy is still in the doldrums.
Only one China stock -- China Mobile <0941.HK> -- has found a place among his top holdings, even as international investors pour money into the world's third-largest economy. [ID:nTP205394]
Young, a Briton, graduated in politics and landed a job as a broker only upon the recommendation of a friend. He has been investing in Asian equities since the mid-1980s after first getting a taste of the region by backpacking through India, Bangladesh and Nepal.
He set up the Asian arm of Aberdeen Asset in 1992 with less than $500 million in assets and is now based in Singapore.
A practitioner of what he calls a "Warren Buffett-like" investment strategy, Young hunts for well-managed companies at reasonable prices for long-term gain.
Aberdeen's one major addition to its portfolio in recent months was Hong Kong Exchanges and Clearing <0388.HK>, which it bought "when everything looked battered and bruised", said Young, who collects Asian art and artefacts as a hobby. The fund manager doesn't chase rallies or hold large amounts of cash to time the market, which he says is difficult to do. His advice to junior colleagues is to "keep it simple".
"I haven't come across many trading portfolios that have survived very long," said Young, whose top holdings include Singapore's Oversea-Chinese Banking Corp <OCBC.SI> and United Overseas Bank <UOBH.SI>, and Hong Kong conglomerate Swire Pacific <0019.HK>.
"If you can time things correctly and buy on the good days and sell on the bad days, that's fine. In our experience, there are not many people who get it right everytime."
STICKING TO KNITTINGS
Aberdeen's conservative style has helped it outperform the market during a difficult 12 years when Asia experienced the 1997/98 financial crisis, the dotcom crash of 2001, the SARS outbreak in 2003 as well as the meltdown in regional markets after Lehman Brothers' collapse in September 2008.
According to data from Lipper, Aberdeen's main Pacific Equities fund returned an annualised 8.6 percent in dollar terms since its launch in December 1997 against a 5.9 percent annualised rise in the MSCI Asia ex-Japan index <MIAPJ0000PUS>.
The fund is ranked by Lipper in the top 20 percent of similar funds by total return and in terms of wealth preservation. Fund-tracker Lipper is a unit of Thomson Reuters.
Young's unit has not escaped the latest market meltdown unscathed though, as client withdrawals and falling stock prices have pushed assets down from a peak of $52 billion about two years ago.
The fund manager acknowledged the firm's equity funds have underperformed in recent years partly due to the firm's caution during the long bull-run before Lehman's collapse.
But Young said Aberdeen will "stick to its knittings" and invest for steady returns over the long term rather than switch portfolios aggressively in the short term. Its portfolio turnover is around 20 percent a year versus over 100 percent for many rivals, he said.
Nash Benjamin, CEO of Singapore retailer FJ Benjamin <FJBN.SI>, in which Aberdeen has a 7 percent stake, said Aberdeen managers researched his firm for nearly six months about three years ago before making an initial 3 percent investment and were thorough in their follow-up visits.
"They understand our business. Everytime we have a briefing, they refer to the notes of the previous meeting and they always refer to what was discussed before," Benjamin said, adding Young "had a very clear vision of where he wants to go".