Type: Unit trust
Aim: Growth by investing in Chinese companies
Minimum-maximum investment: Lump sum £500, monthly £100, Isa lump sum £1,000, monthly £50
Investment split: 100% in Chinese companies
Isa link: Yes
Pep transfers: Yes
Charges: Initial 5.25%, annual 1.5%
Commission: Initial 3%, renewal 0.5%
Tel: 020 7314 7699
The Jupiter China fund is a unit trust investing in Chinese markets through Hong Kong and Singapore, in companies that have the potential to become the dominant players in their markets. The portfolio will contain 40-50 stocks in his portfolios and stocks will be allowed to rise to a weighting of 3-4 per cent to allow some flexibility for profit taking if valuations start rising.
Flowers McEwan director David Flowers regards this fund as a potentially excellent product for higher-risk clients taking a long-term view. He thinks it could fund its way into many portfolios.
“China, along with India, is the obvious medium to long term growth story and early investors have the opportunity of reaping significant dividends in due course,” he says.
In Flowers’ view, Jupiter presents the case in a compelling way with a good glossy brochure. He also think it has, in Philip Ehrmann, a fund manager who has a good track record in this type of investment management.
“There is nothing unusual in his management philosophy but his experience of emerging markets provides some comfort in what will inevitably be a volatile sector,” says Flowers.
Assessing the charges, Flowers says: “The charges are predictable and predictably at the higher end but reasonable for all that.”
Discussing the potential drawbacks of the fund Flowers says: “Like most Chinese funds, it is really a Pacific Basin fund using the Hong Kong and Singapore stock markets rather than risk exposure to the illiquidity and lack of regulation within the Chinese financial markets.”
In terms of the main competition Flowers points to a cluster of China funds such as the newly launched Fidelity focus fund. “However most of these use other Far Eastern markets to access China, with Hong Kong a particular favourite conduit. So an alternative way to gain exposure to China is through the longer running funds such as the Schroder Hong Kong fund.”
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Average