China’s top mutual funds welcome unlimited investments as their star managers expect to strike gold in declining market
- Wanjia Asset Management and Zhonggeng Fund Management have removed the daily cap on subscriptions
- Three funds managed by Huang Hai at Wanjia have returned at least 20 per cent so far this year, while the Shanghai Composite Index has lost 17 per cent
Some of China’s best-performing mutual funds have scrapped the daily cap on public subscriptions, indicating that star money managers have spotted bargains in Asia’s worst-performing market this year.
Wanjia Asset Management removed the daily quota of 100,000 yuan (US$14,934) for individual subscribers last week, while Zhonggeng Fund Management cancelled a 10,000 yuan requirement from Tuesday, according to separate statements from the two Shanghai-based firms.
Three mutual funds overseen by Huang Hai at Wanjia have returned at least 20 per cent so far this year, while another managed by Qiu Dongrong at Zhonggeng has gained 0.8 per cent in value. These funds have outperformed the 17 per cent loss in the benchmark Shanghai Composite Index this year, which has been whipsawed by the lockdown measures imposed in more than 40 cities to curb the most severe outbreak of Covid-19 in China in more than two years.
“The structural opportunity stands out after the pullback in share prices of lots of good quality companies,” said Wanjia’s Huang in his fund’s first-quarter report. “We firmly believe that the level near 3,000 points will be a staunch bottom of the capital market in the long run.”
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Zhonggeng’s Qiu shared a similar view, saying that above-average returns may come from those value stocks and growth companies whose share prices have had “full corrections”.
Huang manages assets worth about US$200 million, while Qiu manages over US$9 billion, according to Bloomberg data.