This series of papers will introduce you to the key questions related to the current investment environment in Chinese equities: ‘Why invest in China?’, ‘How can an active manager add value in Chinese equities?’, and ‘What are the implications for investors of the evolving Chinese equity market structure?’.
One: Why China now? Why make a dedicated allocation to China
We believe MSCI’s decision to include China A-shares in its Emerging Markets & ACWI indices is a significant event for investors.
Two: Why China now? The beta argument
Chinese equities offer one of the highest revenue, earnings and cashflow growth opportunities globally.
Three: Generating ‘alpha’ in China: A 4Factor perspective
The Chinese A-share market is inefficient due to the domination of retail investors, poor quality economic data and inefficient capital allocation by companies.
Summary: The alpha and beta of Chinese equities
Mainland Chinese A-shares offer exciting opportunities to disciplined bottom-up stock pickers.