Tech war: ex-Huawei manager turns sanction adversity into 56 per cent gain as China’s chip-focused funds lure US$2.9 billion inflows
- Lei Tao’s Topsperity Semiconductor Industry fund returned 56 per cent so far this year, while his top five stock picks surged by 35 to 240 per cent
- In all, 36 onshore semiconductor-focused equity funds lured 20.2 billion yuan (US$2.9 billion) in fresh inflows last quarter: EastMoney data
Two of China’s actively-managed semiconductor funds are handing investors huge gains this year by turning adversity from punitive US technology sanctions into opportunities, while rewarding Wall Street banks with bullish calls on onshore stocks.
Topsperity Semiconductor Industry Mixed Fund, a 879 million yuan (US$127.5 million) vehicle managed by ex-Huawei Technologies Co manager Lei Tao, has risen 56 per cent since the start of the year, compensating for a 24 per cent loss in 2022. The 668 million yuan ChinaAMC Semiconductor Leading Mixed Launched Fund, managed by Gao Xiang at ChinaAMC, returned 27 per cent, on top of a 4 per cent rise last year.
The CSI Semiconductor Industry Index, which tracks 40 stocks with a market value of 11 billion yuan, advanced 31 per cent, after sliding 30 per cent in 2022. The market benchmark CSI 300 Index rose 4.3 per cent last quarter, and 3.7 per cent so far this year.
Since the US began restricting China’s access to advanced chips and equipment, Beijing has made self-sufficiency and tech investment its policy and strategy to overcome the hurdles. The prospect of state support and stimulus has helped fuel a rally in an array of “little giants” in the chip-related industry.
“The process of domestic replacement is accelerating and the artificial intelligence [AI] industry is bringing new demand,” Lei at Topsperity Securities, said in his report to investors on April 13. “None of these driving forces have fully played out, and we remain optimistic about the market for the whole year.”