On the Road: China
Pruksa Iamthongthong and Gabriel Sacks share their thoughts from a trip to China in late October, where they saw some of our small-cap holdings and reached out to prospects while getting a better feel of things on the ground
Unlock China’s true potential
The onshore equity market of the world’s second largest economy is deep and liquid. It is also dominated by sentiment-driven retail investors, making it an ideal hunting ground for active, long-term investors.
Risk warning
The value of investments, and the income from them, can go down as well as up and an investor may get back less than the amount invested. Past performance is not a guide to future results.
Quality focus
We have been investing in Chinese equities since 1992. Our stable, experienced on-the-ground team combines local insights with fundamental research. In doing so, the team aims to target and invest in high-quality, well-governed companies with strong balance sheets and clear competitive advantages. We also integrate environmental, social and governance (ESG) analysis in our investment process and actively engage managements to improve corporate performance.
Structural growth
We design portfolios to benefit from structural growth in China, reflecting urbanisation and a rising middle class. As wealth snowballs, we anticipate demand for high-end food and beverages, health care, consumer finance and insurance. Digital interconnectivity bodes well for companies dealing in cybersecurity, the cloud and smart homes. China is a leader in the push for decarbonisation in areas such as renewable energy, electric vehicles, energy storage (batteries) and related supply chains.
Why China
China's domestic market contains unique home-grown firms in industries not accessible via offshore markets. Low correlation with global markets provides valuable diversification benefits. At the same time, investors can access different types of Chinese businesses listed offshore, such as internet firms and in sectors including education, gaming and telecoms. Both markets offer opportunities to capitalise on China's structural growth.
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Funds in focus
Exceptionally diversified solutions to allow investors to diversify risk and optimise investment opportunity.