Bull run in China stocks to continue in Year of the Ox, top Hong Kong MPF managers say
- Funds investing in China, Taiwan and Hong Kong were last year’s best performers, earning more than 31 per cent
- The 401 investment funds under the compulsory retirement scheme, on average, grew 12.2 per cent last year
Investors in Hong Kong’s Mandatory Provident Fund (MPF) can continue to bet on Chinese stocks in the Year of the Ox despite some short-term volatility, top performing fund managers said.
“In the short term, we would not be surprised to see a period of consolidation in markets. In China in particular, as economic momentum accelerates it is likely we will see some modest tightening of monetary policy,” said Raymond Chan, chief investment officer of equity Asia-Pacific and portfolio manager at Allianz Global Investors.
05:55
SCMP Explains: Hong Kong’s Tracker Fund
The Greater Bay Area will also drive growth for Chinese companies, Chan said. “We believe the longer term story for Greater China markets remains compelling. The experience has strengthened China’s credentials as an emerging world economic power through the last year,” he said. Chan favours companies that could outperform despite the pandemic, such as those in the internet, 5G infrastructure, renewable energy and biotechnology sectors.
Funds investing in China, Taiwan and Hong Kong were last year’s best performers, earning more than 31 per cent. Of the top 10 investment funds, seven were equity funds investing in China stocks.
JPMorgan Asset Management (Asia-Pacific) was the top fund manager last year, after BOCI-Prudential My Choice, which it manages, earned 51.75 per cent in returns.
“China has forged ahead in the global economic recovery, given its quicker rebound from Covid-19, and it has been an export beneficiary from stimulus elsewhere. For example, we have seen strong growth in solar installation and electric vehicle sales helped by European stimulus policies,” a fund spokesman said.
02:35
China's ambitious plan to develop it own ‘Greater Bay Area’
The Principal Smart Plan – Principal Dynamic Greater China Fund was last year’s third-best performer, with 46.94 per cent. “China’s GDP growth is expected to speed up to 8 per cent or above in 2021, which is generally higher than the projected 4 per cent to 5 per cent in Europe and America,” a spokesman said.