FSSA Greater China Growth A

Greater China equity fund offering exposure to mainland China mostly through Hong Kong and Taiwan.

  • 1073.83p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • -
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 4.00% 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 1.75%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 1.84%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 0.20%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 29 September 2020, fund data last updated 04 March 2016

This fund aims to achieve long-term capital growth. The portfolio of equities offers exposure to mainland China, Hong Kong and Taiwan. The fund is constructed from the bottom up and has high active share. The manager uses GARP (growth at reasonable price) approach to portfolio construction, and has an absolute return mindset.

Fund summary

Sector China/Greater China
Structure OEIC
Launched December, 2003
Size £545m
Yield 0.20%
Charging basis Income
Dividends paid Acc units only

Charges

Standard initial charge 4.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.75%
Ongoing charges figure 1.84%

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Investment process

This is a fairly concentrated portfolio, benchmarked for reference purposes only against the MSCI Golden Dragon Index. The fund is constructed on a bottom up basis, targeting companies that are investor friendly, have sound business models, strong franchises and a good management track record. Financial criteria include growth in earnings and return on equity at a reasonable price. Company visits are an essential part of the investment process and the team are locally based. The manager's investment style emphasises high conviction levels on all stocks within the portfolio - there are no positions held for relative benchmark risk purposes.

Martin Lau has a successful track record managing money in this region, having previously been responsible for Greater China mandates at Invesco. Historically, the manager proved his ability to consistently add value above the benchmark with lower levels of volatility than regional benchmarks and better downside protection. Lau is supported by a strong investment team at First State and benefits from the proprietary research performed by other fund managers at the company. The fund does not cover the whole of the Asia Pacific region, although still offers some diversification compared to a single country fund. From 1st January 2012, the fund was soft-closed to new investors due to capacity constraints, but reopened on 1st March 2016.

Manager research

Average monthly relative returns

  • 15/16 0.21%
  • 16/17 -0.51%
  • 17/18 0.52%
  • 18/19 0.66%
  • 19/20 -0.20%

Bestinvest MRI

  • 3 years 0.33%
  • 5 years 0.14%
  • Career 0.53%
  • 3 years 96.00%
  • 5 years 88.50%
  • Career 99.70%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Martin Lau

Lau joined First State in April 2002 as a Senior Portfolio Manager, and is responsible for Asia Focus, Greater China and regional funds- the former now officially separated from Tulloch’s Asia Pacific Leaders fund. He was appointed Director, Greater China Equities, in October 2003 following the merger of their Edinburgh-based Asia Pacific team with the Hong Kong and Singapore Asian teams. He started his investment career at Invesco in 1995 and assumed responsibility for their Greater China fund in 1998; other responsibilities included a smaller companies fund and regional portfolios. Lau graduated from Cambridge University with a BA and Masters in Engineering, and is also a Chartered Financial Analyst. Lau is based in Hong Kong.

Track record

Martin Lau has 22.5 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.53%. During the worst period of relative performance (from January 1998 - February 2000) there was a decline of 35% relative to the index. The worst absolute loss has been 54%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is more than 99%.

Periods of worst performance

Absolute -54.00% (February 1998 - August 1998)
Relative -35.00% (January 1998 - February 2000)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

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Top 10 holdings

Data accurate as at 31 July 2020

8.4% Taiwan Semiconductor Manufacturing
7.2% Tencent Hldgs Limited
4.3% Midea Group Co Ltd
3.9% Aia Group Ltd
3.7% China Mengniu Dairy Co
3.5% China Merchants Bank Co Ltd
3.5% Cspc Pharmaceutical Group Ltd
3.5% Advantech Co
3.1% Enn Energy Hldgs Ltd
2.5% Techtronic Industries Co
Source: Trustnet

Sector breakdown

Information Technology 26.00%
Consumer Discretionary 19.00%
Industrials 14.00%
Consumer Staples 12.00%
Financials 8.00%
Communications 7.00%
Health Care 6.00%
Utilities 4.00%
Real Estate 3.00%
Money Market 1.00%

Portfolio

Stock numbers have risen to 70-80 as IPO issuance has expanded. Stock exposure min 1%, max 10%. Usually 50% invested in mid or smaller cap companies. Less than 10% of the current allocation to Chinese A shares.

Constraints

The sum of stocks with weightings above 5% shall not exceed 40% of the portfolio value. Max 10% cash.

Key Investor Information

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