China 

Guide to investing in China

  • To understand what impact the addition of A shares to MSCI will have.
  • To ascertain what investment opportunities and risks abound in mainland China.
  • To learn how to create portfolios to capture China growth but minimise risk.
CPD
60min
Guide to investing in China

Introduction

Chinese corporations were given a welcome boost after MSCI announced it was adding 222 A-Shares stocks to its emerging markets index in 2018.

According to various commentators, this could see approximately $17bn (£13.2bn) to $18bn (£13.9bn) worth of money flow towards mainland Chinese companies, and open the mainland market to even more overseas investors, both retail and institutional.

However, over the past decade, the powerhouse of the East has somewhat lost its status as a high-growth market. In the early part of the 2000s, China was seen as the fastest-growing economy on earth, thanks to its huge infrastructure plans, government spending and its demand for natural resources.

But with its days of double-digit GDP growth over - it was 14.2 per cent in 2007 and was 6.7 per cent in 2016 - what are the continued prospects for China?

Contributors to this guide include: Josh Crabb, head of Asian equities for Old Mutual Global Investors; Howard Wang, manager of the JPMorgan Chinese Investment Trust; Arif Husain, head of international fixed income at T Rowe Price; Gary Monaghan, an investment director based in Hong Kong for Fidelity International; Fathom Consulting; Maarten-Jan Bakkum, senior emerging markets strategist for NN Investment Partners; Nimalan Govender, portfolio manager, Asia Pacific, and Cyrique Bourbon, portfolio manager, EMA, for Morningstar Investment Management; MSCI Indices; Victoria Mio, co-head of Asia Pacific equities and chief investment officer for China at Robeco; and Charles Sunnucks, assistant fund manager on Jupiter’s Global Emerging Markets team.

simoney.kyriakou@ft.com

In this guide

CPD
60min
  1. What does Mr Crabb say is starting to correct thanks to the inclusion of 222 mainland China shares to the MSCI index?

  2. What does Mr Wang expect over time?

  3. According to Mr Monaghan, what remains a risk?

  4. What does Mr Monaghan say the lack of analysts on the A-Shares market means for investors?

  5. Mr Sunnucks says international investors have a far greater preference for larger cap businesses. True or false?

  6. What needs to be contained in order for active management in mainland China to add value, according to Mr Bourbon?

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