David Cameron today shook on an agreement with China premier Wen Jiabao to double the value of trade with the UK by 2015, but how can retail investors best cash in on this?
In the open-ended universe, First State Greater China Growth has consistently outperformed the IMA China/Greater China sector over one, three and five years, and taken on less risk than the average fund in the sector, according to FE Analytics data.
Performance of fund vs sector over 5-yrs
Source: FE Analytics
The £607m fund, run by FE Trustnet Alpha Manager Martin Lau, has a 24 per cent weighting to telecoms, media and technology (TMT), compared with 15 per cent from the sector average.
Chunghwa Telecom is one of its biggest holdings, along with industrial equities such as oil and gas exploration and provider company CNOOC.
Other funds worth a look include Fidelity China Focus – although performance has slipped of late – and Franklin Templeton China.
The $5.2bn Fidelity fund is run by Martha Wang and is also slightly overweight TMT, while Mark Mobius’ $2.3bn Franklin Templeton vehicle has a heavy basic materials bias.
China investment isn’t for the faint-hearted. While long-term returns look good, every vehicle in the sector has lost money over the past one, three and six months.