* Templeton Asia fund lost 7.8 pct in 2013 vs benchmark's 3
* Mobius blames commodities, Thailand stocks for poor
* Investors pull out net $500 million from his fund in 2013
By Nishant Kumar
HONG KONG, Jan 14 Emerging markets fund manager
Mark Mobius is heading into 2014 with heavy investments in Thai,
commodities and energy stocks, the same bets that led to the
biggest miss for his $14 billion Asia fund in almost a decade
and a half.
Investors last year pulled out an estimated $500 million
from his Templeton Asian Growth Fund, the most recorded by fund
tracker Lipper since it started compiling flows data for Asia's
biggest equity fund in 2003.
The fund lost 7.8 percent last year compared to a 3.33
percent rise in the MSCI AC Asia ex-Japan index,
its second straight year of underperformance, the data showed,
while its peers on average gained 2.4 percent.
Mobius, however, remains unfazed and said Thailand's past
resilience to crises made him committed to its economy.
"We stick to our guns very often," Mobius, executive
chairman of Templeton Emerging Markets Group, told Reuters.
Political turmoil contributed to foreign investors pulling
out more than $750 million from offshore Thailand equity funds
over the last five months, Lipper data showed. They took out a
net $376 million in 2013, reversing inflows in 2012.
Mobius is considered an authority on emerging markets. His
often contrarian "value investing", which involves buying
out-of-favour stocks, has earned nearly 200 percent returns for
his Asia fund over the last 10 years, one of industry's best.
This very same approach, however, backfired last year,
largely because of the political unrest in Thailand and China's
waning appetite for commodities.
Templeton's top 2013 bets in Thailand, Siam Commercial Bank
PCL and Kasikornbank PCL, lost money. China
investments such as Inner Mongolia Yitai Coal and
Yanzhou Coal Mining slumped over 35 percent each.
At the end of November, however, Mobius invested a quarter
of his Asian fund assets in Thailand, more than eight times the
weight of the country in its benchmark index.
Templeton's allocation to Hong Kong and China stood at 31.4
percent at end-November, down from 32.5 percent at the start of
the year, data from Lipper showed.
"We are going to be back in Thailand because this political
situation is not going to remain the same," he said.
"There will be some changes as there had been in the past.
But the fundamental direction of the economy in Thailand would
be very positive."
Protesters trying to topple the Thai government for the last
two months have sparked concerns about Southeast Asia's
second-largest economy. The Thai currency has fallen
since October and the stock market slumped 12.7 percent
last year in U.S. dollar terms.
Mobius said commodities demand would bounce back even as the
economy of China, the world's biggest resource buyer, is
forecast to grow at the same pace as the previous year.
In a separate note, Franklin Templeton said it saw value in
the energy sector, given demand trends, and that stock-picking
was critical to addressing macroeconomic concerns in countries
such as India and Indonesia.
"It's not over yet. Commodities are still going to be
important," said Mobius, who had a combined 40.1 percent
allocation to energy and materials stocks at end-November.
Mobius started 2013 with 46.8 percent of his fund invested
in the energy and materials sectors, nearly four times the
weight of such stocks in his fund's own benchmark index.
Templeton has since cut out losing bets such as PetroChina
Co Ltd and SK Innovation Co Ltd from its