Overweight in top Asian stock funds on Samsung Electronics (SSNLF.US): Valuation is extremely attractive, optimistic about future performance.

Amidst the rise in the South Korean stock market, a top-performing Asian stock fund has turned its focus to Samsung Electronics (SSNLF.US). The Ninety One Global Strategy Fund - Asian Equity Fund, based in London and managing $1.6 billion, has recently increased its holdings in Samsung. The fund's screening strategy often uncovers stocks that investors have "abandoned" based on geographical or industry trends. Data shows that the fund has achieved a 15% return so far this year, outperforming 94% of its peers. The fund's bet on Samsung comes as investors continue to pour into the South Korean stock market, driven by optimism about corporate governance reforms. The South Korean KOSPI index has risen by nearly 30% this year, making it one of the best-performing stock market indices globally. Fund manager Charlie Linton stated that many investors have mispriced the company, as it lags behind competitors like SK Hynix in the high bandwidth memory (HBM) chip market. Charlie Linton mentioned that his team relies on a model to select stocks in the Asian region based on various factors, including quality, valuation, operational performance, and technical momentum, picking stocks that can withstand market volatility. Despite Samsung's stock price lagging behind SK Hynix, which supplies HBM to NVIDIA Corporation, this year, Charlie Linton believes that once Samsung's next-generation DRAM chips enter mass production, its stock price could catch up with its competitors. Samsung's stock price has risen by 20% this year, while SK Hynix's has surged by nearly 60%. He added, "Almost everyone is underweighting Samsung right now. We have taken a more proactive stance, partly because its valuation is very attractive."