OVCHF - EWS: Singaporean Equities Offer Diversification Value But Upside Potential Is Moderate

• EWS is a relatively popular fund used to express a single-country view on Singapore.
• Singaporean equities have underperformed historically. While the current valuation looks appealing, the opportunity is not exciting.
• EWS's major holdings are heavily exposed to the Asia-Pacific Financials sector (the two largest stocks in the portfolio are banks).
• Therefore, while Singaporean equities are not currently "expensive" (as compared to U.S. equities), EWS is not likely to attract significant upside considering that China is already ahead in its business cycle.
• A further reining in of lending in the region could soften medium-term performance of Asia-Pacific Financials, and as such, I would probably rather own U.S. Financials than Singapore Financials all considered.

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