Performance in the past few months has been strong. Is that driven by sterling weakness or stock selection?

The weakness of the pound has helped, but actually these shares have generally been doing well over recent months.  The main driver I think is that the economic outlook is more stable than people thought it might be. Secondly, the reporting season we have just had was really good. We had a lot of growth stocks delivering strong earnings growth.

How do you invest in Chinese firms: through the Hong Kong or Chinese exchanges, or via US-listed companies?

In Hong Kong that market is really no longer cheap. If you want value stocks you have to go into financials, where there are problems. 

The “A-share” markets [the Shanghai and Shenzhen stock exchanges in China] are really interesting: they are a little bit wild west and they are post-market-bubble territory, so a lot of people are scared off. That means there is quite a lot of value in certain companies.

What we’ll see over the next three to five years is that all China funds will have more A-shares in them.

Do you invest your own money in the fund?

Yes, of course.

What would you have done if you hadn’t been a fund manager?

A number of years ago I wanted to be a tree surgeon, but I ditched that idea. Fund management was one of those things I decided I wanted to do when I was at university and just pursued it until I was offered a job.

Independent view:

Amaya Assan is a senior research analyst at Square Mile:

China’s transition from a heavy industry-based economy to a consumer and services-led one has long attracted the attention of global investors.

For many fund managers, consumer-oriented companies offer one of the most attractive areas for investment. 

Rising urbanisation and income growth are leading to a burgeoning consumer class that is increasingly eager for better goods and services. The obvious beneficiaries are companies focused on innovation and customer service.

The Henderson China Opportunities fund has a much longer history than most UK-domiciled China funds. The fund invests in Chinese and Hong Kong company shares, although investments can include Chinese and Hong Kong companies listed on US stock exchanges, as well as companies that are generating a significant portion of revenue from China but are based elsewhere.

The lead manager, Charlie Awdry, has been involved with the strategy since 2003, and is well acquainted with the history and evolution of many companies operating in this part of the world.

After spending some time in Hong Kong in the mid-2000s, Mr Awdry is now based in London and works with Singapore-based assistant manager May Ling Wee. This allows them to blend on-the-ground company research with decision-making being made without the distractions of the local markets.

The fund’s performance relative to its benchmark since Mr Awdry took charge in June 2006 has been positive, although this masks the fact that performance has been somewhat lumpy with periods of significant underperformance. 

The clean share class of this fund is cheaper than many other Chinese-focused funds.



Source link