Fidelity’s Ma gears up for China comeback

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Fidelity’s Raymond Ma has taken his two China equity funds onto an aggressive footing as he seeks to capitalise on a return to form for the Chinese market in the coming year.

Ma, who runs the $679 million Greater China and $1.12 billion China Consumer fund, made the comments as part of a first quarter market outlook.

This has seen Ma undertake a series of changes to both his portfolios in a bid to capitalise on a more promising outlook for Chinese growth than markets anticipate.

‘I have turned more aggressive and have positioned the fund for a recovery since third quarter of 2012 off the back of improving market liquidity and recovering economic conditions,’ he said.

‘I have trimmed exposure to defensive and increased the financials. I have also increased exposure to small and mid-caps which were over-sold last year and they are expected to benefit from a re-rating.’

Financials is the strongest sector allocation in both funds, representing 43.8% of the Greater China fund and 34.7% of the China Consumer fund.

Asian exposure

In addition to altering his sector and cap-weighted allocations, Ma said he was also moved to boost his exposure to wider Asian markets in both funds.

In the China Consumer fund he currently has 65% allocated to the Chinese market, with 20% in Hong Kong and nearly 10% in Taiwan.

Meanwhile, in the Greater China fund, Taiwan (19.7%) and Hong Kong (18.1%) represent an even greater percentage of geographic exposure.

‘I have added to the fund’s overall Asia exposure as I believe the Asian market has bottomed and should benefit the most from the increased liquidity conditions.’

‘We have already seen valuation re-rating of Chinese equities in the last three months.’

Consumer specialist Ma took over the Greater China fund from Joseph Tse in August 2012 and has run the China Consumer fund since its launch in February 2011.

The Fidelity Funds – Greater China A-USD has returned 25.59% over the three years to the end of February 2013. This compares to its Citywire benchmark, the MSCI Golden Dragon TR, which rose 23.92% over the same period.

Meanwhile, the Fidelity Funds – China Consumer fund has returned 6.48% in US dollar terms in the 25 months since launch. This compares to its benchmark, the MSCI Golden Dragon TR, which rose 2.03% over this period.