Fund's five-year cumulative performance stands at 118pc against a benchmark return of just 7.8pc The Dresdner RCM Oriental Income Fund, launched in 1985 and run by Allianz Dresdner Asset Management, has outperformed its index for 12 out of the past 15 years, including the past five turbulent years, putting it head and shoulders above many of its peers. No stranger to awards, this is the second time the fund has found itself being recognised by the South China Morning Post, having won the Equity Asia Pacific Three-year Award in 2002. To see why it has won again in 2003, you simply need to look at the numbers. By the end of last year, its calendar year performance stood at 53.55 per cent (calculated in US dollars) compared with its benchmark, the MSCI AC Asia Pacific Free, which returned 38.07 per cent, according to Standard & Poor's Fund Services. That is all very well, but it is when you look at the long-term gains that it gets really impressive. According to Datastream, the fund's five-year cumulative performance stands at a heady 118.30 per cent against a benchmark return of just 7.87 per cent. The fund, which carries a five-star ranking from Standard & Poor's and Morningstar, invests in a combination of Asia-Pacific equities, debt, convertible bonds and other instruments to achieve above average capital growth for its investors. As of the end of last year, it held US$138.14 million in assets under management. Now, the fund has a fairly aggressive asset allocation which has stemmed from it recently upping its equity exposure to chase returns. Traditionally, the fund manager operates within pretty flexible guidelines of 50 per cent to 100 per cent equities and zero per cent to 50 per cent bonds and convertible bonds. As at the end of last month, 83 per cent of the fund was invested in equities, 14 per cent in fixed income and the rest in liquid assets. Equity-wise, its biggest country exposure is Japan, which took up 31 per cent of the portfolio's asset allocation. After that, Hong Kong has 11 per cent, Australia has 10 per cent, Thailand has 6 per cent, India and Taiwan have 5 per cent each, and South Korea, Singapore and China have 3 per cent each. Favoured companies include mining firms Rio Tinto and BHP Billiton, both taking 3 per cent of the equity portfolio, and Japanese real-estate firm Mitsui Fudosan and Japanese robotics firms Fanuc, which are both allocated 4 per cent. In terms of bonds, the highest individual allocations include New Zealand government bonds (2.7 per cent), Hong Kong's PCCW-HKTC Capital (2.55 per cent), Hysan (MTN) (1.14 per cent), Jardine Strategic Finance (1.11 per cent), and Hutchison Whampoa International (1.11 per cent). Another 2.06 per cent is allocated to the United States Treasury Inflation Index. The fund is managed by Stuart Winchester, who has spent the past 19 years in Asia and joined the firm in 1992. He uses a dynamic asset allocation strategy with a bottom-up approach, of which the geographical asset allocation is a by-product. Hence, the fund varies quite dramatically in areas from its benchmark, the MSCI AC Asia Pacific Free, which allocates 60.3 per cent of its exposure to Japan, almost double that of the fund. Equally, the fund is far less bullish on Australia and South Korea but is more so on Hong Kong. The strategy has served the fund well. It has outperformed the MSCI AC Asia Pacific Free consistently over one, three and five years. Supporting the decisions behind switches in asset allocation are 21 analysts, organised by sectors, who follow the activities of 400 companies in the Asia-Pacific region. The data is then analysed alongside global trends, which are picked up and monitored by 73 analysts worldwide. Allianz Dresdner Asset Management is the world's third-biggest asset management company with US$1 trillion in assets under management. With major international brand names such as PIMCO, Nicholas Applegate and Oppenheimer Capital under its belt, Allianz is able to leverage its wide number of styles and investment approaches employed by the various divisions of the group.