Chinese equity market shows no sign of slowing on the back of global growth and its increasing internal economic momentum. But which managers are leading the charge?
Marking the first day of the Chinese New Year, Citywire Selector has uncovered the three fund managers with the strongest outperformance over the last five years to the end of January 2018.
The three managers showcased here have all returned in excess of 175% which comes at a time when the most widely-held benchmark, the MSCI China TR USD, returned 75.27% in US dollar terms over the analysis period.
3. Caroline Yu Maurer, BNP Paribas AM
Five-year total return (January 2013-January 2018): 175.28%
Caroline Yu Maurer joined BNP Paribas Investment Partners in 2007 from Henderson. She started as a research analyst for the Asia Pacific ex-Japan equity team and later became a portfolio manager.
According to the latest data for her Greater China fund, which is up to December 2017, the top three holdings in her strategy are tech giants Tencent and Alibaba, as well as financials group Ping An Insurance. The majority of the holdings are denominated in Chinese yuan.
2. Bin Shi, UBS AM
Five-year total return (January 2013-January 2018): 180.33%
Citywire AAA-rated manager Bin Shi is a member of UBS' global emerging market and Asia pacific equities. He focuses primarily on Chinese stocks listed on both the overseas and domestic Chinese stock exchanges.
Speaking to Citywire Selector in 2017, Shi said a lot of Chinese companies, such as CSPC and Sino Biopharm, which both sit in his top 10 holdings, have grown amid the production of so-called 'me-too' and 'me-better' drugs.
‘They continue to spend heavily on R&D, we believe they will continue to take shares and become bigger in the future,' he said.
Another theme Shi is watching is the Chinese A-shares market and he capitalised on the launch of the Shenzhen-Hong Kong Stock Connect. He bought two A-share stocks through this initiative and he is ready to take advantage of other opportunities in this space.
1. Alex Wai Shing Ko, BNP Paribas AM
Five-year total return (January 2013-January 2018): 223.54%
Hong Kong-based manager Alex Wa Shing Ko is Citywire + rated for his work across three China-dedicated equity strategies, as well as his role on India and Indonesia-focused equity funds and an RMB bond strategy.
The biggest strategy among his China funds is the BNP Paribas Flexi III Chinese Equity A I Cap fund. This invests in shares listed on the Shanghai or Shenzhen Stock Exchange but cannot exceed 50% of the outstanding stock of any one company.
On a case-by-case basis the fund can also invest in Chinese government bonds, convertible bonds and warrants. While the two BNP Paribas-branded funds remain open, the Flexifund Equity China A Classic Cap (HKD) was closed in October 2017.