The Allianz China A-Shares is the best-performing China equity fund in terms of trailing three-year performance, returning 78%. It also fell during China’s June market plunge, but not as much as the other top four, according to FE data.
One reason could be an allocation rebalancing that began in January. According to the Allianz fund’s factsheet, holdings in financials and basic materials were constantly trimmed, while exposure to industrials, consumer products and TMT were increased.
Financial sector holdings for the Allianz product fell from a high of 53.1% in January to 32.3% as of June 30, according to FE.
In contrast, the fifth-ranked HS China B-Share Focus increased its holding in financials in May.
The Allianz fund also stayed away from large China banks. Among the top five China equity performers, only UBS (Lux) Equity China Opportunity has a large Chinese bank among their top 10 holdings.
Curiously, the Allianz fund did not have the lowest volatility of the top five. UBS (Lux) Equity China Opportunity had the least volatility over the trailing six months, although when the market fell, it had more downside than the Allianz fund.
