High risk investing in China
THE performance of China funds over the past few years has shown that investing across the border carries a high degree of risk as well as the potential of big rewards.
Stock markets in the People's Republic have see-sawed in the past three years, hitting highs in late 1993 before slumping as much as 30 per cent.
Most of the China funds which are covered by the Micropal performance survey are down over the 12-month period to the end of July, with the Dao Heng China Fund the worst performer, having fallen 24.01 per cent. The best performer, Credit Lyonnais China Growth Fund, was up 5.05 per cent.
With China continuing to modernise and attract investment, however, Hong Kong fund management groups are still optimistic about the long-term outlook for the Chinese stock markets. Schroder Investment Management showed its long-term confidence by launching its China/Hong Kong Fund in January this year.