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General risks: The value of investments, and any income generated from them, can fall as well as rise. Where charges are taken from capital, this may constrain future growth. Past performance is not a reliable indicator of future results. If any currency differs from the investor's home currency, returns may increase or decrease as a result of currency fluctuations. Investment objectives and performance targets may not necessarily be achieved, losses may be made.

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Institutional

China: The Second Great Transformation

Strategies

Read more about our equity and bond strategies focused on the growth opportunity in China

Investec All China Equity

 

Download the strategy profile

 

Investment objective:

The Strategy aims to provide long-term capital growth primarily through investment in equities or equity-related securities issued by Chinese companies listed anywhere in the world.


Greg Kuhnert

Greg Kuhnert

Co-Portfolio Manager

Wenchang Ma

Wenchang Ma

Co-Portfolio Manager

Why invest in all-China equities?

  • Chinese equities offer one of the highest revenue, earnings and cashflow growth opportunities globally
  • Investing in both onshore and offshore Chinese equities doubles the investment universe and maximises the potential of finding interesting investment opportunities
  • The All China market is a better representation of the Chinese economy, providing access to unappreciated quality blue chips in the industrial, consumer and healthcare sectors.
  • Looking through shorter-term volatility, we believe the China A-share market offers attractive longer-term potential

Why 4Factor for Chinese equities?

  • Specialist China team based in London and in Hong Kong
  • Strong track record of picking stocks in China over the past decade
  • We follow a strong, disciplined and tested investment philosophy
  • We have grown our Chinese equities under management to US$5.9bn and managed total assets of US$54.5bn as at December 2018
  • Our global perspective enhances analysis of Chinese stocks

Strategy highlights

  • Investment universe: Chinese companies listed anywhere in the world, inclusion of A shares doubles the universe size
  • Minimum market cap: US$500m, daily liquidity US$2m, minimum coverage by two analysts
  • Portfolio construction: maximum 60 stocks
  • Performance target*: 3-5% per annum above MSCI All China Index

*Performance target may not necessarily be achieved, losses may be made. 
The above guidelines are internal and subject to change without prior notice.

Investec All China Bond

 

Investment objective:

The Strategy aims to provide income with the opportunity for long-term capital growth primarily through investment in a portfolio of debt securities issued by Chinese borrowers both offshore and in mainland China.

Wilfred Wee

Wilfred Wee

Portfolio Manager

Peter Eerdmans

Peter Eerdmans

Portfolio Manager


Why Investec Asset Management for Chinese fixed Income?

  • A long history in emerging markets
  • Tried and tested emerging market bond and currency processes
  • Investec Asset Management has an established team of experienced professionals and investment process

Why invest in Chinese fixed income?

  • Strategic opportunity to invest in China’s internationalisation story at attractive yields
  • Allocating to Chinese fixed income can help diversify overall portfolio returns
  • China’s credit markets are diverse and differentiated, and offer opportunities across the cycle
  • The renminbi offers investment opportunity
  • Gain exposure to the world’s largest developing bond market that is under-represented and set to increasingly feature in global fixed income allocations
  • Manage US$3.2bn in Asian EMD assets within global EMD portfolios, as at 31 December 2018

Strategy Highlights

  • Can invest in offshore CNH bonds, onshore CNY bonds and USD-denominated bonds issued by Asian companies that are strongly linked to China's economy
  • Broad investment mandate that allows for active management to unlock relative value opportunities across the onshore CNY, offshore CNH and US$ markets
  • Strategy targets 1.5% per annum, gross of fees, over rolling three-year periods versus the Markit iBoxx Asia Local Bond Index China Offshore

Performance target will not necessarily be achieved, losses may be made.


Specific risks

All China Bond and All China Equity have the following risks:

Geographic / Sector: Investments may be primarily concentrated in specific countries, geographical regions and/or industry sectors. This may mean that the resulting value may decrease whilst portfolios more broadly invested might grow. Currency exchange: Changes in the relative values of different currencies may adversely affect the value of investments and any related income. Emerging market (inc. China): These markets carry a higher risk of financial loss than more developed markets as they may have less developed legal, political, economic or other systems.

All China Bond has the following risks:

Default: There is a risk that the issuers of fixed income investments (e.g. bonds) may not be able to meet interest payments nor repay the money they have borrowed. The worse the credit quality of the issuer, the greater the risk of default and therefore investment loss. Derivatives: The use of derivatives may increase overall risk by magnifying the effect of both gains and losses leading to large changes in value and potentially large financial loss. A counterparty to a derivative transaction may fail to meet its obligations which may also lead to a financial loss. Interest rate: The value of fixed income investments (e.g. bonds) tends to decrease when interest rates rise. Government securities exposure: The Fund may invest more than 35% of its assets in securities issued or guaranteed by a permitted sovereign entity, as defined in the definitions section of the Fund’s prospectus.

All China Equity has the following risks:

Derivatives: The use of derivatives is not intended to increase the overall level of risk. However, the use of derivatives may still lead to large changes in value and includes the potential for large financial loss. A counterparty to a derivative transaction may fail to meet its obligations which may also lead to a financial loss. Equity investment: The value of equities (e.g. shares) and equity-related investments may vary according to company profits and future prospects as well as more general market factors. In the event of a company default (e.g. insolvency), the owners of their equity rank last in terms of any financial payment from that company. Concentrated portfolio: The portfolio invests in a relatively small number of individual holdings. This may mean wider fluctuations in value than more broadly invested portfolios.

 

Important information

All information is as at 31.12.18 unless otherwise stated.