As it stands, he believes the Chinese market looks to be among the most attractive of the emerging markets. Chinese markets have valuation on their side, with the market trading on a low price to earnings ratio – 10x 2014 earnings, compared to its long-term average of 13.2x earnings. The price-to-book ratio is also supportive. Nevertheless, Mr Shiao is seeing a wide dispersion between the returns from different sectors, which makes stock selection important.
EXPERT VIEW
Ben Willis, investment manager and head of research, Whitechurch Securities
Verdict
A lot of credit must go to current managers, Lorraine Kuo and Mike Shiao, since taking over the fund in mid-2012. Prior to their tenure the fund had been bang average but the current managers have delivered some serious alpha, nearly trebling the return of the IMA sector since taking over. If you are looking to gain exposure to China, then this is certainly one to consider.
