NewChinese state funds’ Q1 portfolio strategy goes contrarian, quietly
China’s state funds, known as the “national team,” ditched market favourites and quietly began collecting laggards in the first quarter, adopting a contrarian strategy in their portfolio allocations.
China’s state-backed funds spent the first quarter of the year quietly selling off stock investors’ favourites, and buying laggards, the latest data suggests.
“The national team” – the market’s nickname for Chinese investors of state-linked funds – cut its holdings in this year’s best-performing consumer stocks including, Gree Electric Appliances and liquor maker Luzhou Laojiao, according to data compiled by Sinolink Securities.
While at the same time it added added low-valuation banking shares, including China Minsheng Banking and Bank of Nanjing whose stocks have slid at least 5 per cent this year, the data showed.
The actions seem to buck market trends this year with investors generally accumulating consumer stocks, pushing companies including Gree and liquor giant Kweichow Moutai to all-time highs, while dumping financial companies amid the escalating regulatory surveillance against deleveraging.
Selling some consumer stocks could certainly be considered justified on a valuation basis, and some investors including Jingxi Investment Management say having reached new highs this year, the