China Active Fund Watch June 2020: Ardent Investors

Investao Limited > Insight > China Active Fund Watch June 2020: Ardent Investors

Topic: China mutual fund market is recovering, stronger than before – What are the motives and results of this record-breaking growth?

Author: InvesTAO Research

Summary

China mutual fund market has recorded the largest YoY growth since 2018, to a new high of CNY 17 trillion in total net assets. InvesTAO believes that the reasons behind include:

  1. Macroeconomy revealed recovering steps that build confidence
  2. Prudent policies kept up the market sentiment
  3. A-share market was under-valued with a growing momentum

Where do onshore Chinese investors overweight at the momentby the end of 2nd quarter?

  • The most common sectors include cyclical sectors with low valuation, such as infrastructure, and the ones with recovering domestic demand like consumer staples and high-tech industries.
  • Contrarian views, on the other hand, are focused on sectors that benefit from long-term economic recovery and geo-political environment, such as aviation, automobile, and security houses.

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