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Five funds for a China bull market

FSA looks at the top performing funds of the previous two Chinese equity bull markets
Flag of China painted on a cracked wall. Chinese real estate and debt crisis

The past few decades have seen Chinese equities experience multiple bull and bear markets, often suffering peak-to-trough declines of more than 50% before roaring back.

However, the latest bear market, which started with a crackdown on China’s technology companies, has been compounded by extended Covid-19 lockdowns and a struggling property sector.

While Chinese equities are still working its way through its current down cycle, once a new bull market begins investors may be considering which funds have best taken advantage of previous bull-runs.

As such, FSA looked at which Chinese equity funds outperformed during both the 2016 to 2018 bull market (where the MSCI China was up 114%) and the 2020 to 2021 bull market (the MSCI China was up 88%).

Among the mutual funds investing in China, Greater China and Hong Kong equity markets* and available for retail distribution in Hong Kong and Singapore, five strategies stand out with top-quartile performance during both Chinese equity bull market periods considered.

The GAM Multistock China Evolution Equity fund was up 115.26% during the 2016 to 2018 period, and then 112.14% during 2020 to 2021. The $64m strategy is run by GAM Asset Management’s Jian Shi Cortesi.

Performance of fund since inception

The HSBC China Momentum fund also outperformed during both bull market periods, up 121.17% and 115.84% respectively. This $25m strategy is managed by Caroline Maurer and William Chen.

Performance of fund since inception

The HS China Equity fund was another outperformer, up 117.5% and 116.34% respectively. The $33m strategy is run by Hang Seng Investment Management.  

Performance of fund since inception

In addition to the funds above, two notable fund giants stand out with returns in the top quartile returns for both periods. 

The $4.5bn JPM China fund was up 98.6% for the first bull market considered, and 142.76% during the second. It is managed by Li Tan and Rebecca Jiang.

Performance of fund since inception

The $2.4bn Schroder ISF Greater China fund also outperformed, up 94.78% and 113.83% respectively. The strategy is managed by Louisa Lo.

Performance of fund since inception

Below is a list of all the funds with returns in the top quartile for both bull market periods. The funds are sorted by strategy size.

Fund16 to ’18 return (%)20 to ’21 return (%)YTD return (%)3yr return (%)Fund Size(m)Sector
JPM China98.6142.76-19.92-49.114581.3HKM Equity – China
Schroder ISF Greater China94.78113.83-7.11-312470.3Sgp Mt Equity – Greater China
Manulife GF Dragon Growth99113.83-13.6-50.12351.5Sgp Mt Equity – Hong Kong
Value Partners Chinese Mainland Focus97.23127.73-11.65-40.5126.1Sgp Mt Equity – China
HSBC China Growth97.53111.9-11.67-43.39103.7HKM Equity – China
BCM Vitruvius Greater China Equity110.83120.758.01-32.0398.4Sgp Mt Equity – Greater China
GAM Multistock China Evolution Equity115.26112.14-13.78-37.2864.2Sgp Mt Equity – China
Harvest China Equity106.01111.15-13.71-43.8757.4HKM Equity – China
CSOP China New Balance Opportunity97.71165-12.08-37.953.4HKM Equity – Greater China
HS China Equity117.5116.34-13.14-43.7833.4HKM Equity – China
HSBC China Momentum121.17115.84-10.8-45.8825Sgp Mt Equity – China

*The top-performing funds were measured in US dollar terms. The bull market performance is based on data from FE fundinfo between 15/2/2016 to 26/1/2018 and 18/3/2020 to 17/2/2021. The data only included funds that fall under the China, Greater China and Hong Kong equity sectors within the Hong Kong SFC Authorised Mutual or Singapore Mutual fund markets based on data from FE fundinfo. The performance ranking was based on all the funds in the aforementioned sectors with performance data for the periods considered.

Part of the Mark Allen Group.