A Decade of Investing in China – The Emerging Superpower
23 March 2015
Standard Life Investments, the global asset manager, is celebrating 10 years of investing with its now $181m China Equities SICAV. The Fund has been a top decile performer over 3, 5 and 7 years and first percentile over 10 years, returning 438% to investors versus the MSCI China Index return of 247% since launch1.
Strong contributors to the performance of the Fund over the decade include stocks such as online flash sales marketing company, VIPS, which is up over 2000% since purchase; Shandong Weigao, a medical consumables company, and Tencent Holdings, the social networking platform.
Looking back over the last ten years, Magdalene Miller, manager of Standard Life Investments' China Equity SICAV, said;
"The last decade has offered investors in Chinese equities investment opportunities on a scale that few other countries can match. Looking forward, its efficient workforce, rising middleclass and a government committed to developing infrastructure all result in forecasts which predict that China will in time surpass the US as the world's largest economy.
"Over the decade, I have witnessed the rise of some Chinese internet companies which now stand alongside their global peers. I have also witnessed the transformation of traditional sectors, such as textiles into leaders in their field. Furthermore, the transformation from State Owned Enterprise to High Tech focus is epitomised by the changes in the MSCI China Index. After November 2015, MSCI China will add 17 US-listed Chinese stocks making IT/Software the third largest sector in the country index and the largest globally.
"We exploit our robust and repeatable investment process in this fertile hunting ground in order to track down the exciting companies that are benefitting from the country's transformation into a more consumption and service-oriented economy. I have travelled huge distances to some of the most remote areas in China experiencing people's warmth, entrepreneurship and eagerness to learn. I believe that this direct contact combined with the in-depth sharing of investment views across our asset class desks and our Focus on Change philosophy are key to our successful stock selection for the Fund. We are taking full advantage of the genuine diversification this emerging superpower has to offer – an exciting proposition which is bound to offer further rewarding prospects for our investors."
Magdalene Miller has spent the last 27 years of her career investing in Asian equity portfolios. The fund aims to provide long term growth and is designed for investors who are looking for exposure to the Chinese equity market. Magdalene invests in a high-conviction portfolio of 25 – 35 stocks, taken from the best ideas generated by Standard Life Investments' Asia & Global Emerging Markets Equities team of ten, all of whom adhere to the company's Focus on Change investment philosophy. The Fund, which has a 5* Morningstar rating, is available in euro, sterling and US dollar share classes.
1 Morningstar, Total Return for the period; 01/03/2005 – 28/02/2015. Institutional share class D in USD.