Defeated China mutual fund managers bet on same recipe to help recoup 2022 losses
- Fund managers at Manulife Teda, Aegon-Industrial and China International have been buying green stocks, according to filings
- The CSI New Energy Index of 80 stocks has risen 174 per cent since the end of 2018, despite a hiccup in 2022
China’s defeated fund managers are adjusting their portfolios to turn around their performance after a rotten year in 2022. Pushing into the renewable-energy sector has become a common thread in their strategy, according to recent disclosures.
The clean-energy sector, which is thriving on China’s intention to transition to carbon neutrality by 2060 to stem climate-change effects, has policy tailwinds behind it. Solar and wind power installations are being accelerated under the current five-year plan to 2025, pushing the nation ahead of its 2030 target.
The CSI New Energy Index, which tracks 80 top industry players, has rallied 174 per cent since end-2018 despite a slump last year. Managers at Manulife Teda Fund Management, China International Fund Management and Aegon-Industrial Fund Management have recently bought equipment makers, lithium producers and engineering contractors, according to local exchange filings.
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China's largest offshore wind farm ready to start operations
“We continue to be constructive on renewable energy plays, especially in solar equipment,” said Evan Li, head of Asia energy transition at HSBC. “Reopening of mainland China should restore construction and installation of solar farms, while state-owned power groups are still striving to meet their targets for decarbonisation for 2025, hence serving upside to sales for equipment makers.”
The 26 trillion yuan (US$3.8 billion) mutual fund industry, comprising 8,952 investment vehicles, will be hoping for a better outcome in 2023. It lost about 11 per cent on average, according to an estimate by Guotai Junan Securities, the most since at least 2019.
The MSCI China Index, the broadest measure of Chinese stocks at home and offshore, retreated 24 per cent last year.
Wang Peng, who oversees 12.1 billion yuan at Manulife Teda, bought about 200 million yuan worth of shares in Dajin Heavy Industry, a wind-power equipment maker, according to a December 31 filing.