US investor appetite grows for Chinese stocks despite market bloodbath and trade worries
- US funds have continued to add Chinese stocks to their holdings in recent months as local investors exit
- ‘Bottom line is, we are bullish on Chinese stocks,’ says T Rowe Price equity CIO Justin Thomson
A stock market bloodbath in China this year may have spooked investors in the country, but Wall Street fund managers see bargains in the carnage.
First Wilshire, a Pasadena, California-based firm managing about US$400 million of US capital, is among US investment managers that have been adding Chinese stocks in recent months.
It aims to increase its holdings of Chinese shares to about 30 per cent, equivalent to about US$120 million, up from a little less than US$100 million at the beginning of the year.
“When we saw [Chinese] people on the street no longer liked the stock market back in July, we loved it. Because it was precisely the time when we can find great discounts,” said First Wilshire CEO Scott Hood, whose firm has invested in China for more than four decades.
And discounts they found. Stocks on the Shanghai Stock Exchange have dropped 23 per cent in value so far this year, with the composite Shanghai index losing nearly 1,000 points to 2,550 on Wednesday.