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First State Greater China Growth Inclusive - Class A - Accumulation (GBP)

Sell:1,050.80p Buy:1,050.80p Change: 3.89p (0.37%)
Prices as at 7 August 2020
Change: 3.89p (0.37%)
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
Prices as at 7 August 2020
Change: 3.89p (0.37%)
Prices as at 7 August 2020
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
The selling price currently displayed is higher than the buying price. This can occur temporarily for a variety of reasons; shortly before the market opens, after the market closes or because of extraordinary price volatility during the trading day.

Our view on this Fund

This fund is on the Wealth Shortlist of funds our analysts believe have the potential to outperform their peers over the long term. However, this is not a recommendation to buy.

This fund is run by a manager and team with a great pedigree of investing in China. Martin Lau, the fund's lead manager, has an impressive record in this sector, and he also has the support of other experienced investors. We like the team's culture and philosophy - they view themselves as stewards of investors' capital, looking after it as though it's their own.

The fund focuses on the Greater China region. It could form part of a broader global portfolio, or diversify the Asian and emerging markets equities portion. We think China has excellent long-term growth potential, though a fund focused on a single emerging country is a high-risk option so investors should expect volatility and it should only make up a small portion of an investment portfolio.

Our view on the sector

China has continued to grow its economy strongly but the rate of growth has slowed in recent years. The economy is going through a transition, shifting from a focus on low-value exports, high investment and infrastructure spending, to domestic consumption and services. Companies are also benefiting from looser regulation, anti-corruption policies, rising consumer spending and improved healthcare and technology. China's a higher-risk emerging market though. The transition from an export-driven to consumption-driven economy will not happen overnight. It could take years to come to fruition and there will be setbacks along the way.

Performance Analysis

Lau has an excellent long-term track record. The First State Greater China Growth Fund launched in 2003 and it's since performed much better than the broader Chinese stock market. Other funds Lau has run over his career have also outperformed their respective benchmarks. Our research shows he's achieved this by focusing on the prospects of individual companies, rather than taking a view of the wider economic environment. As with any investment in emerging markets, investing in China can be more volatile than developed market investing. Remember, past performance isn't a guide to the future.

Investment Philosophy

Lau and his team look for quality companies they can invest in for the long term. They are conservative investors, looking after clients' money as if it's their own, and view themselves as long-term stewards of investors' capital.

Process and Portfolio Construction

Lau likes companies with a competitive advantage that others struggle to replicate, such as a well-known brand or the ability to raise prices for their products without affecting demand from customers. They should have the potential to grow earnings sustainably over the long run, and be run by reputable management teams that don't take unnecessary risks in the pursuit of short-term gains.

Importantly, companies must also take into account environmental, social and governance factors. They should cause little, if any, harm to the environment around them or the labour they employ, for example. Over time it's become an increasingly important part of the team's investment process. If they don't think a business meets these standards or is doing enough to address a particular problem, then they won't invest.

At the moment the fund mainly focuses on sectors that could benefit from rising consumer spending, including technology, and companies that produce consumer staples such as food and beverages. It mainly invests in larger companies, though the fund can also invest in higher-risk smaller companies.

question mark Manager Track Record Based on HL Quantitative Research

  • First State Greater China Growth...
  • FTSE Greater China All Cap Index

Fund Track Record

07/08/15 to 07/08/16 07/08/16 to 07/08/17 07/08/17 to 07/08/18 07/08/18 to 07/08/19 07/08/19 to 07/08/20
Annual return 15.65% 23.29% 12.07% 5.82% 19.96%

Please remember past performance is not a guide to future returns. Where no data is shown, figures are not available. This information is provided to help you choose your own investments, remember they can fall as well as rise in value so you may not get back the original amount invested.

Fund Management Group Comment

First State Investments originates from Australia and is part of the Commonwealth Bank of Australia. First State offers a range of funds across areas including Asia, emerging markets, global resources, global equities, property securities and infrastructure. As fund managers, their expertise has been noted in specialist areas like Asia and emerging markets where First State has recruited some of the industry's most talented investment professionals.

Information about the fund

Fund manager biography

manager photo
Manager Name: Martin Lau
Manager start date: 1 December 2003
Manager located in: Hong Kong

Martin Lau was appointed Director, Greater China Equities in October 2003 following the merger of the Edinburgh-based Asia Pacific team with the Hong Kong and Singapore Asian teams in September 2003. Martin joined First State Investments in April 2002 as Senior Portfolio Manager, responsible for the management of First State's Greater China and regional funds. Martin started his investment career in 1995 with BZW in London as part of their risk management team. He subsequently spent six years with Invesco as a fund manager responsible for the Greater China funds, Smaller Companies fund and regional portfolios. Martin graduated from Cambridge University with a Bachelor of Arts degree and a Masters degree in Engineering. He is also a CFA charterholder.

Data policy - All information should be used for indicative purposes only. You should independently check data before making any investment decision. HL cannot guarantee that the data is accurate or complete, and accepts no responsibility for how it may be used. Benchmark data provided subject to this disclaimer.
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account