Some of China’s largest equity funds are lagging the broader market in 2024 despite Chinese stocks breaking out of multi-year lows.
Over $25bn of actively managed assets invested in Chinese equity strategies have not kept up with the pace of their benchmarks despite the recent equity market surge.
In late September, the Chinese government announced a series of announcements to stimulate the country’s economy, which prompted a sharp rally in Chinese equities.
After lagging most other developed and emerging markets year-to-date, certain China equity exchange-traded-funds (ETFs) experienced enough gains to outpace the S&P 500 index, buoyed by concentration in China’s largest listed stocks.
However, some of the largest actively managed Chinese equity strategies on offer have not kept up with the pace of the recent rally.
Below are the year-to-date performance figures of the 10 largest actively managed China equity funds, according to data from FE fundinfo as of 31/10/2024*.
| Fund | YTD return (%) | YTD benchmark return (%) | Benchmark | 3 year return (%) | Fund size ($m) | ISIN |
| JPM China | 12.9 | 21.2 | MSCI China 10/40 Index | -40.8 | 3655.2 | LU0051755006 |
| JPM China A-Share Opportunities | 7.8 | 16.1 | CSI 300 | -42.5 | 3246.8 | LU1255010958 |
| UBS (Lux) Equity China Opportunity | 8.5 | 21.2 | MSCI China 10/40 | -31.2 | 3176.2 | LU0067412154 |
| Allianz China A-Shares | 10.9 | 14.6 | MSCI China A Onshore | -46.2 | 2805.1 | LU1997245177 |
| Schroder ISF Greater China | 10.1 | 24.7 | MSCI Golden Dragon | -26.8 | 2420.2 | LU0161616080 |
| FSSA China Growth | 5.9 | 21.9 | MSCI China | -30.9 | 2414.1 | IE0008368742 |
| Schroder ISF China A | 5.2 | 14.6 | MSCI China A Onshore | -34.2 | 2341.3 | LU1713307426 |
| Fidelity China Focus | 11.2 | 21 | MSCI China Capped 10% Index | -0.9 | 2199.4 | LU0173614495 |
| GS China A-Share Equity Portfolio | 10.6 | 14.6 | MSCI China A Onshore | -35.2 | 1805.3 | IE00BL3V0519 |
| Principal Hong Kong Equity | 19 | 24.8 | Hang Seng Index | -26 | 1677.8 | HK0000036530 |
The largest and highest returning fund above was JPM China, managed by Rebecca Jiang and Howard Wang.
They follow a growth focused investment approach, which faced headwinds over the past few years.
Their preference towards technology, healthcare and new energy stocks weighed on its performance, as these sectors suffered the most during the most recent downturn.
The Chinese stock market is still down some 40% from its highs set in 2021 after government crackdowns on its biggest technology companies and a prolonged real estate crisis weighed on its economy.
Most of the funds above have largely tracked the decline of the Chinese equity market over the past few years, with the exception of the $2.2bn Fidelity China Focus strategy, which is roughly flat on a 3-year basis.
Managed by Nitin Bajaj and Alice Li, the fund’s emphasis on value and large caps has been beneficial to its longer term performance.
*The fund performance was measured in US dollar terms based on data from FE fundinfo. The funds were only those fall under the relevant Hong Kong SFC Authorised Mutual or Singapore Mutual sectors as classified by FE fundinfo.
