The fund will hold 40 to 60 Chinese stocks of any size and is benchmarked against the MSCI Zhong Hua index. It is managed by Martin Currie director James Chong, who has 15 years’ investment experience, and a team of nine Shanghai-based analysts. It will also draw on the resources of the Martin Currie’s Edinburgh-based Asian team.
As the fund’s portfolio manager, Chong will take a bottom up approach to stockpicking and will rely on information gathered from company visits and detailed financial analysis. The team conducts over 1,000 company visits in China each year.
Chong, who is Chinese, joined Martin Currie in 2006 and is based in Edinburgh. He was previously vice-president of equities at Lombard Odier Darier Hentsch in Hong Kong, where he managed several Greater China mandates. He has also worked at South Capital Group, Nikko Securities and Mees Pierson Securities. He manages the Martin Currie Greater China Sicav.
When managing the fund, Chong and his team will look for good quality companies that have strong growth potential. They focus on changes that will have a positive effect on companies and drive returns.
Martin Currie launched its first China equity fund in 1997 and according to IFA firm Hargreaves Lansdown, it was the first foreign investor when the markets opened. It manages $4.7bn in Chinese equities, which represents 25 per cent of the firm’s total assets under management.
Martin Currie says now is a good time to give retail investors access to Chinese equity markets. It says China’s long-term growth prospects and place in the global economy provide opportunities for investors who do not have a great deal of exposure to the region. It says growth has been strong but not reflected in the stockmarket, which will play catch up as corporate earnings and profits rise.
China has attracted the interest of veteran Fidelity fund manager Anthony Bolton, whose investment trust could provide competition for Martin Currie. However, the Chinese equity market is volatile, prompting companies such as Insynergy and Veritas to take a long and short approach to the region. These alternatives could be more attractive than a long only fund to some investors because they do not depend on stocks rising in price.