Chinese fund managers buy new-energy stocks and ditch tech giants, quarterly portfolio report shows

Sungrow Power Supply, WuXi AppTec and Shanxi Xinghuacun saw the biggest increases in holdings of fund managers in the third quarter

Total assets managed by China’s mutual funds increased 4 per cent quarter on quarter to US$3.7 trillion at the end of September

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A jumbo screen shows stock prices in Shanghai. Chinese fund managers added holdings of new-energy, pharmaceuticals and small liquor makers in the third quarter. Photo: EPA-EFE

Published: 7:30am, 29 Oct 2021Updated: 10:29pm, 29 Oct 2021

Chinese money managers added holdings of new-energy, pharmaceuticals and small liquor distillers in the third quarter, while trimming positions in technology juggernauts and companies with exposure to the property industry, according to mutual funds’ quarterly reports.

Sungrow Power Supply, WuXi AppTec and Shanxi Xinghuacun Fen Wine Factory were among fund managers’ biggest increases in holdings in the past quarter, the reports showed. Tencent Holdings, the Chinese social-media giant trading in Hong Kong, Industrial Bank and Beijing Oriental Yuhong Waterproof Technology bore the brunt of the sell-offs in the period.

The repositioning offers an insight into how money managers were navigating through a raft of headwinds – accelerating inflation, China Evergrande Group’s debt woes, the power outage and the continuing fallout of the regulatory crackdown – that roiled stocks over the past month.

The total assets managed by China’s mutual funds increased 4 per cent from the previous quarter to 23.4 trillion yuan (US$3.7 trillion) at the end of September, with 6.4 trillion yuan allocated to stocks, according to the data by Eastmoney.com. The industry’s equity holdings accounted for about 7 per cent of the total values of the companies trading on the onshore markets.

Shanghai Stock Exchange’s benchmark index weathered the regulatory onslaught far better than the Hang Seng Index in Hong Kong in the third quarter. Photo: AFP

China’s Shanghai Composite Index lost 0.6 per cent in the third quarter, as the diversity of the industries the listed companies are engaged in provided shelter from Beijing’s unprecedented scrutiny of the technology industry. In comparison, Hong Kong’s Hang Seng Index had a brutal quarter, slumping 15 per cent, as about a third of the market caps of the companies on the benchmark were directly exposed to the regulatory onslaught.