Equity funds from China undergoing maturity assessment
Three Leading China Equity Funds Pass Significant Test
Three prominent China equity funds – the Fidelity China Innovation Fund, the Goldman Sachs All China Equity Portfolio, and the Schroder All China Equity Fund – have recently passed a rigorous test on our website in June 2021. The test's results were substantial enough to warrant a closer look.
The Fidelity China Innovation Fund (ISIN: LU0455706654) adopts a more targeted, growth-oriented investment approach focused on Chinese tech companies with an emphasis on quality and reasonable valuations. Major holdings include Tencent, Alibaba, and Xiaomi. By contrast, the Goldman Sachs All China Equity Portfolio and Schroder All China Equity Fund are broader all-China equity funds with more diversified exposure across sectors beyond tech.
The Fidelity China Innovation Fund's allocation of space for each topic depends on the number of good companies the analysts find there, with technology making up 51 percent of the subcategories. The fund contains between 40 and 60 stocks and has a significant volume, exceeding the 100 million euros mark in June 2021.
The Schroder All China Equity Fund, established three years ago, also surpassed the 100 million euros volume mark in June 2021 and contains between 30 and 60 stocks. Lifestyle accounts for 40 percent of the subcategories in the Fidelity China Innovation Fund, with the rest of the portfolio focusing on environmental technology.
The Schroder All China Equity Fund has a diverse portfolio, investing across multiple sectors, but specific approaches for Goldman Sachs and Schroder funds were not detailed in the search results. The Fidelity China Special Situations Trust, a related vehicle, has a strong bias toward domestic Chinese consumption companies, comprising about 80% of its holdings. The trust employs bold use of gearing (leverage of about 18-21%) to enhance returns, reflecting strong conviction in China’s market valuation compared to peers.
In summary, the Fidelity China Innovation Fund stands out with a tech-sector growth tilt and targeted approach, while Goldman Sachs and Schroder funds offer more diversified all-China equity exposure. Fidelity's related Special Situations fund also emphasizes domestic consumption and uses leverage aggressively, reflecting differentiated risk/return preferences. This indicates material strategic differences across these China-focused funds.
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