Fitch Ratings has placed the Henderson China Opportunities fund’s “satisfactory” rating under review.
In its latest report, the ratings agency says performance of the fund – managed by Charlie Awdry – has deteriorated since the beginning of the year.
According to Fitch, deterioration has been due to stock selection in a number of sectors and as a result of “overweights in off-benchmark stocks”.
“The fund’s ability to adapt to changing market regimes throughout the year has been challenged,” it notes.
“Henderson has taken corrective actions. Fitch needs to assess whether these actions adequately address changing market conditions and solve the stock picking issues.”
The ratings agency expects to resolve the “under review” status of the funds after six months.
In response to the rating action, Charlie Awdry says: “Over the long term we are focusing on the most dynamic part of the Chinese economy which is centred on urban consumers who are enjoying double digit wage increases and over the short term we are looking for the Communist Party Congress to create calm after a turbulent political year which may allay investor fears and allow valuations to rise as risk aversion falls.”
Year-to-date, the fund has generated a total loss of 0.1 per cent to 31 October, compared with an average total return for the IMA China/Greater China peer group of 6.9 per cent, according to FE Analytics. (On a bid-to-bid basis).