2015-05-19

What Will China's Mutual Funds Buy?

What Will China’s $1 Trillion Mutual Funds Buy In Hong Kong
Based on the latest quarterly data from mutual funds that use the QDII quota, Chinese mutual funds seem to like themes. They like healthcare, clean energy and brokers, as well as state-owned enterprises that have the reform theme. Tencent (700.Hong Kong), Ping An Insurance (2318.Hong Kong) and China Mobile (CHL) show up repeatedly in the top 10 active QDII equity funds.

Interestingly, Chinese mutual funds do not care for “unique” plays. Their top 10 holdings have no exposure to Macau.

Their holdings outside of Hong Kong are also interesting. The top holding of the 8.4 billion yuan ChinaAMC Global Equities is IMAX Corp. (IMAX) IMAX is very popular in China. The 8.8 billion yuan China Southern Global Equities have large exposures to WisdomTree Europe Hedged Equity Fund (HEDJ) and Deutsche X-Trackers MSCI Europe (DBEU). The 7 billion yuan CIFM Asia-Pacific Equities likes Samsung Electronics (SSNLF) and TSMC (TSM).
Brand names such as Want Want (0151), Chow Tai Fook (1929) and Mengniu (2319) and plenty more will also be of interest.

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