Big funds are missing out on the China party
Concerns of a China slowdown and a US-China trade war have helped global hedge funds take average gains under 3% so far this year, while the MSCI China Index skyrocketed 14%
Robert Duggan of SkyBridge Capital, which manages US$11.8 billion in assets, describes investors’ wariness of China in understated terms. “We haven’t seen many funds get overly bullish in Chinese equities markets, so most missed the recent move,” Duggan was quoted by the Wall Street Journal as saying.
The commodities rebound and recovery in producer prices in China has fueled a rally for China stocks in Hong Kong, helped by mainland investors, and Chinese tech firm stocks in the US have joined the party.
Portfolio manager Jim Fong argues this year’s rally is different from that of two years ago. “This time, the share-price gains are not as irrational as last time (…) the economic data is not bad, and commodity prices have increased compared to last year.”