Veteran fund manager reveals 4 of his favorite large-cap global stocks

Published Mon, Sep 13 202111:45 PM EDT

Hugh Young, chairman for Aberdeen Standard Investments Asia, has named four of his favorite large-caps, saying it's still possible to find well-priced stocks "if you do the homework." Speaking to CNBC's Pro Talks on Wednesday, Young, who has worked in finance since the 1980s, named two Asian large-caps that he likes in particular. "Samsung is still pretty good value," he said. "TSMC [Taiwan Semiconductor Manufacturing Company] is a great company, but probably fairly valued rather than undervalued as Samsung is." Young said it was a "lot harder" to find value in larger stocks. "Often the large cap area is where you get the valuations extended on momentum; for example, where everyone is piling into or out of the same thing," he said, noting that Chinese internet stocks are an example of this phenomenon. On TSMC, he said the company was benefiting from strong demand pushing up chip prices, whilst also maintaining a competitive edge. When compared to rival chip company UMC (United Microelectronics Corporation), Young said: "TSMC is clearly the better company and retains its lead." "TSMC would definitely be our top pick of the [chip] companies, and it's one of our largest, if not our largest, holding in our large cap Asia-Pacific fund," he added. "It's a tough industry, there's always competition coming, China is trying to eat into the market and ultimately of course China will succeed," Young said. "Nonetheless, TSMC [has] really managed to keep its technological advantage; it's certainly a head above others which has been impressive, and we've held it now for well over 20 years." Mining stocks Elsewhere, there is also value to be found in the mining sector, according to Young – who particularly likes mining giants BHP and Rio Tinto. "BHP is one of our top 10 holdings in our Asian fund," he said. "They have first rate assets, there's no sign of any long term diminution in demand for them. Yes, the price will fluctuate, but China still needs those goods, as indeed do other developing economies in the world." "Given such strong long term demand, I think providing you're careful in commodities and get the real top end of the market such as BHP, it's a pretty decent investment," Young told CNBC. Young manages the Asia-Pacific Equity Fund, which is down 1% so far this year, and the Asia Focus Fund — which largely tracks small caps — which has gained around 40% over the past year.

CNBC Pro Talks: Veteran fund manager Hugh Young discusses his top stock picks and China's crackdown

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CNBC Pro Talks: Hugh Young discusses his top stock picks and China's crackdown

Pro Talks

Hugh Young, chairman for Aberdeen Standard Investments Asia, has named four of his favorite large-caps, saying it's still possible to find well-priced stocks "if you do the homework."