Interview: Charlie Awdry, Gartmore

The focus of the expedition will be what every western consumer most readily associates with the world’s most populous nation: light manufacturing. This the world of cheap consumer goods sold to home-building Americans – microwaves and hair dryers, stereos and sports equipment. It is the world that collapsed in the credit crunch.

The question now is: will the old dragon rise from the ashes? This is not the China of the fiscal stimulus and the infrastructure build, nor was it historically the China of the rising middle classes – the two areas emerging market managers tend to emphasise these days. Yet Mr Awdry nonetheless claims there is a chance the companies in Schenzen will have seen a pick up in orders – and he is going out there to ask them.

He articulates his case with a mixture of youthful enthusiasm and level-headed logic. “The export sector hasn’t been an area we’ve looked at for a number of years because domestic China was always our focus. We still like domestic China, but the potential for a profit turnaround from any export recovery could be very important. This trip is all about seeing whether there has just been an alleviation of pressure or a genuine pick-up in the outlook. If there has been a pick up, it would be very good for China.”

By comparison with many of his peers in the industry, Mr Awdry is fresh-faced. He joined Gartmore’s emerging markets desk as a graduate trainee in 2001 and took over the £717m China Opportunities fund only five years later, in June 2006. He moved further into the limelight when his fund became the very top-performing UK mutual fund for the calendar year 2007. This was partly being in the right place at the right time – China outperformed every other stock market in 2007 – but he also outperformed his benchmark by nearly 20 percentage points.

Last year was a different story, of course: Gartmore China Opportunities plunged 39 per cent, against 32 per cent for the MSCI Zhong Hua benchmark. Yet in the rising market this year Mr Awdry is once again ploughing ahead of the index, having clocked growth of 47 per cent year to date.

The manager is sanguine about the volatility. His explanation is simply that Hong Kong is a very hot-headed place. “One minute they can be euphoric and think everything’s fantastic, then three months down the line they think there’s a flu scandal and it’s the end of the world. The majority of the participants in the market are very emotional,” he observes.

But Mr Awdry stresses this is not necessarily a bad thing, as it offers the “cold-headed, rational institutional investor” the chance to buy stocks on the cheap. Volatility is the professional’s opportunity to get ahead.

Having lived in Hong Kong for six months as part of his training programme at Gartmore, the manager knows the market’s mood swings from first-hand experience. Now he travels to China two or three times a year and says he probably spends a month a year there, on average.