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China set for boost from social media | Trustnet Skip to the content

China set for boost from social media

26 January 2011

Henderson investment trust manager Andrew Beal dismisses talk of a bubble in the region, and says stock picking is key in China.

By Lora Coventry and Mark Smith,

Senior Reporter, Analyst, Financial Express

Social media stocks will boost China portfolios, Henderson TR Pacific Investment Trust manager Andrew Beal says.

"Social media is growing at a massive rate in China, with online gaming becoming a huge part of this social media," Beal said.

He added: "Sina.com is an online media company that occupies an important niche in sports, entertainment and popular current affairs content. These areas continue to attract significant visitors to the company's website and generate substantial advertising revenues."

The manager pointed out that Hong Kong-listed Chinese equities have performed poorly over the past year, despite attractive earnings growth.

"As a result, we continue to find strong companies at attractive valuations that are geared into China's long term growth," he said.

Performance over 3-yrs

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Source: Financial Express Analytics

Beal's £350m trust has around a 40 per cent holding in financials, with its second largest sector weighting is telecoms, media and technology (TMT).

Financial Express data shows the trust outperforming its sector by around 25 per cent over three years. The trust was trading at a discount of 6.6 per cent as at 25 January.

Patrick Connolly, head of communications at AWD Chase de Vere is wary on investors blindly shifting assets into Chinese equities.

"In the long term we are generally positive about China and emerging markets, however, in the short term there are fears about inflation and the sense that the economy represents a bubble ready to burst," he said.

"The important thing is not to over-expose yourself. It would make sense to have China in your portfolio but the larger the proportion then the greater the risk."

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.