China Investment? Which fund to choose?

Since the suspension of Ant Group’s IPO, China government has introduced unprecedented regulations to govern several sectors including the technology, food delivery and education sector. This does not seem to stop but continue for the past few months. Due to the regulatory crackdown, many retail investors have dumped the shares massively. The institutional investors have also reduced their exposure to the related shares to avoid the volatility.

As you can see the chart above, the MSCI China Index dropped 32.65% since the highest point. Does this freak you out?

If you have invested in Chinese equities, stay invested as the fundamental of Chinese equities remains intact. Subject to your investment portfolio, you can choose to top up to average down the price for the Chinese equities.

If you have not invested in Chinese equities, it could be a good chance to have some in your long-term investment portfolio. Be greedy when others are fearful!

So, what fund you can select for the China equities? You can look into Principal Greater China Equity Fund (this is for education purpose and speak to your investment advisor before investing). Why this fund?

Performance

• 

Source: Morningstar

In terms of performance, comparing with other few peer funds, Principal Greater China Equity Fund has higher return short term and long term. As you can see from the Morningstar, the fund has been performing consistently above the benchmark since 5 years ago. It is also performing greatly compared to the similar category funds.

Return vs reward

Source: Morningstar

In terms of risk vs reward, you can see it has average risk compared to the category but with high return. It has high alpha compared to the similar funds, which is the excess return in relative to the return of benchmark index due to the active investment approach.

Others

This fund has been awarded 5-star by Morningstar and the fee level is below the average. Total assets are now approximately RM 2.6 billions so it is a good size for investors to consider.

If you are interested to know more about this, you can contact me.

************************************************************************

You can receive broadcast message relating to wealth creation to financial freedom through Telegram. Click here to subscribe to the telegram for the weekly newsletter and get updates on regular free classes on wealth creation topic.