Martin Currie Oeic to focus on tech and food
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James Chong, the manager of the upcoming Martin Currie China Oeic, will start the portfolio with overweight positions in the technology, consumer and food and beverage sectors.
At launch on March 10 the fund will hold 40-60 stocks and will be 36.7% invested in Hong-Kong-listed China companies. H-shares (companies incorporated in mainland China) will make up 26.4% of the portfolio. Red chips (based in China but internationally incorporated) will account for 18.3%.
The portfolio will initially be biased to mid and small caps because Chong tends to find better investment opportunities in these market segments. (article continues below)
“Technology equipment is an area that benefits directly from China’s continued move up the value chain,” says Chong. “It is gaining global market share and margin expansion for a number of reasons, including productivity improvement. It is also a direct beneficiary of the increase in China’s domestic consumption and export recovery - both areas that are being fuelled by central government policy. Valuations are attractive.”
Meanwhile, Chong will avoid banks, real estate and telecommunications.
Chong predicts that the rebound in exports and the global economic recovery could spur China’s GDP growth to 9% in 2010 - ahead of the government’s 8% target. “The key however is not just the size of the growth, but also the shape,” he says. “With a pro-growth government, a more relevant consumer and a swathe of entrepreneurial businesses the opportunities available for investors will be significant.”
