J O Hambro eyes China consumer in new funds

J O Hambro Capital Management has launched the Asia ex Japan and Asia small and mid cap fund with an overweight to China, as manager Samit Mehta is unconcerned about growth issues for the country.

The Asia ex Japan will sit in the JOHCM’s Dublin range. The funds will be managed by Samit Mehta and Cho-Yu Kooi, both of whom joined the firm following the acquisition of Singapore-based Silver Metis Capital Management by JOHCM in May 2011.

The Asia ex Japan fund has a 21.5 per cent position in China, 18 per cent position in Hong Kong and 15.8 per cent in Singapore. In Asia small and mid cap fund, 38 per cent of the fund is in China and Hong Kong.

Mehta says: “A lot of holdings in China reflect consumption. People have been reading about the anticipation of a slow-down in China and I think there is a lot of reason to be a bit more cautious, there are various parts of the Chinese economy that have grown quite rapidly.”

He adds: “Growth will moderate and little or no exposure to those sectors that have been the winners of the last decade. We don’t own any cement companies, no steel or oil companies and more concerned about consumption. We’re not likely to see a contraction in consumption.”

Mehta says that there should be wage growth of 15 per cent in China and that will empower people to spend.

The funds have a 1.5 per cent AMC plus performance fee of 15 per cent of excess net performance, subject to application of a high watermark such that any underperformance is carried forward. Initial charge is up to 5 per cent for investment into the retail share class.