Swiss & Global Asset Management has launched the JB China Evolution Fund, providing investment access to the “New Economy” in China which is driven by consumer and technology trends.
The portfolio will consist of 30 to 50 core holdings focusing on companies with strong earnings growth combined with attractive valuations, particularly in technology, healthcare, environmental protection and the broad consumer space.
The Chinese economy is evolving as regulation and reform are transforming the traditional investment driven growth model into a New Economy. These reforms should help China to become the world’s second largest consumer market by 2015, as the country continues to experience one of the fastest growing levels of personal income in the world.
The MSCI China Index has an overrepresentation of China’s ‘Old economy’ with 70 per cent of its constituents comprising telecommunications, energy and financial companies. Many of these companies are mature, state owned and slow-growing industries with significant policy headwinds. The majority are also well covered by analysts.
The JB China Evolution Fund will focus on China’s ‘New Economy’ sectors, allocating up to 70 per cent of its investment in emerging fast-growing industries benefiting from favourable government policy such as consumer, technology, healthcare and clean energy.
The fund will be managed by Jian Shi Cortesi who has over 10 years of industry experience in China, the US and Switzerland. She has a deep understanding of the Chinese economy and already manages the China portfolio of the JB Asia Focus Fund. She will also be able to leverage expertise of Swiss & Global’s in-house sector specialists, in the consumer, energy and healthcare sectors.
Cortesi says: “China’s credit-driven economic growth model is unsustainable, but the world’s second largest economy is evolving as it moves away from an overreliance on investment towards increased consumption. The new reform packages presented at China’s third plenum meeting, in November 2013, included 60 initiatives which to be implemented over the next 10 years. This ambitious plan will enable China to embark on a new growth path through promoting a market driven economy, supporting private businesses, boosting consumption and deepening the urbanisation process.
"The launch of this fund will allow investors to participate in investment opportunities created by the economic transition of China. Our existing in-house sector expertise in China’s new economy will help to identify undiscovered companies poised to start a strong earnings cycle.”