China fund you want to invest in, it's been crash-tested
Citi has come up with a new wheeze for enticing you to invest your money. It's a Greater China fund, or to give it its more exotic title, the China StormRiders Fund.
Citi's spin is that it is the world's first crash-tested Greater China fund. The fund will hold a so-called crash-tested portfolio of China A shares, Hong Kong and Taiwan equities.
The strategy selects stocks based on their performances over the most recent 'crash period' in which a representative country stock index has declined 30 per cent or more.
Initially, small-cap stocks are taken out of the investment universe, as are the loss-making companies. And then the fund isolates stocks with positive price performance from market peak to market trough.
As Citi says in one of the fund's promotional pamphlets, 'All cars are crash-tested today, so why shouldn't equity funds be crash-tested too?'
