This was our first introduction to the strategy. At first glance, in terms of holdings, this is very different to other emerging market strategies we have seen. The performance is strong but it is volatile, and in periods when markets go down this has tended to fall more than the index. This means that although there is the opportunity for strong returns, investors must be prepared to accept the additional volatility this strategy brings.
The manager provided a macro view and in turn, how these feed into the holdings. China did well in 2020 and they reduced holdings so are underweight the index. This reflected the wave of legislation and negative sentiment. Some areas of the education sector will not recover but areas like the internet will. Long term, China will benefit from technology, localisation, green economy, domestic circulation, urbanisation and opening-up…..read more