The sought-after vehicle has been one of the bestsellers in the entire unit trust and OEIC universe in recent months.
FE data shows that inflows of around £1.4bn over the last year have sent assets under management (AUM) to £4bn, making it one of the largest funds in the UK market.
Some industry experts have expressed concern over the speed and quantity of assets going into Pidcock’s fund, but the manager has dismissed these, insisting he has more than enough flexibility to maintain his strong record.
"We’re asked about inflows and capacity very often. At the moment, we’re very relaxed about it – the size of the fund accounts for about 0.2 per cent of the investment universe, which although significant, isn’t enough for us to have big problems with liquidity," said Pidcock (pictured).
"From this point, I think there is plenty of room for the fund to grow."
Pidcock points to the fact that there are no offshore versions of Newton Asian Income, meaning that the overall strategy is the same size as the flagship product. This is not the case for a number of other products such as Aberdeen Emerging Markets, which has a number of onshore and offshore versions.
"One of the ways we’ve looked to stem inflows is by not launching an offshore share class," Pidcock explained. "We do have one for the Newton Emerging Income fund, but not for the Asian Income fund."
The manager says the fund has less invested in small and mid caps than he did at the time of launch, but insists he still has the ability to invest in growing companies in the sectors he likes and gain exposure to growth as well as income.
"The fund is predominantly a large cap fund but we have some mid cap stocks, including a few property trusts," he added.
Pidcock says growing AUM at a sensible manner is a priority, as "asset gathering" will inevitably end in tears.
"My objective is to make as much money as possible for my client, my company and myself – in that order," he said. "If you do it the other way round it doesn’t work."
"There is a need to grow AUM in a sustainable fashion, or no-one wins."
His comments echo those of Somerset Capital's Dominic Johnson, who in a recent interview with FE Trustnet highlighted the cult of asset gathering.
Newton Asian Income is a top-decile performer in its IMA Asia Pacific ex Japan sector since its launch in December 2005, with returns of 174.14 per cent. Only First State Asia Pacific and Asia Pacific Leaders have returned more.
Performance of fund vs sector and benchmark since launch
Source: FE Analytics
Pidcock has also been significantly less volatile than his sector and benchmark.
As the graph shows, the fund underperformed during the steep rising markets of 2005 to 2007, but since then Pidcock has really come in to his own, guiding the fund very effectively through the financial crisis and various sell-offs that have since ensued.
Pidcock says the vast inflows over the past year or so have not impacted the way he runs the portfolio, and the performance of the fund during this period appears to vindicate this view.
Performance of fund vs sector and index over 1yr
Source: FE Analytics
Newton Asian Income has also comfortably beaten its sector and the index over three and five years.
The fund is currently yielding 4.56 per cent. Its objective stipulates that the fund must always yield at least 35 per cent of its FTSE Asia Pacific ex Japan index benchmark, and all new holdings must yield more than the index.
Pidcock also ensures that the fund has a strong sell-discipline. Any holding with a prospective yield that is 15 per cent lower than that of the index has to be sold.
The manager is currently overweight Australia, which has a 30 per cent weighting in the fund, compared with 27 per cent from the index. He is also overweight Hong Kong, Thailand and Singapore, but underweight China and Taiwan.
Telecommunications and industrials are Pidcock’s biggest sector bets at the moment.
Newton Asian Income requires a minimum investment of £1,000 and has an ongoing charges figure (OCF) of 1.16 per cent, but this is likely to be higher if investing through a platform.
