Mumbai: Indian investors poured money into the Mutual Funds that focused on China even as a hard action by Beijing have destroyed more than $ 1 trillion from the capitalization of the joint market giant technology such as Alibaba and Tencent this year.
Although the niche category is only two houses of funds – Edelweiss and Axis – offering this scheme, assets under management (AUM) continue to increase despite negative returns this year (see graph).
The Axis Greater China Equity Fund, which was launched in February this year, has seen his AUM grow 4 times to Rs 120 Crore in August from around RS 30 Crore in February-end, even when the NAV fell 14% at the same time.
Edelweiss Greater China Equity Off-Shore has seen Aum grew 62% to Rs 1,808 Crore in August from around RS 1,119 Crore at the end of 2020, even as a net asset value (NAV) fell more than 6% in the same period.
Both have a funding fund structure (FOF), where capital is invested in the underlying scheme, which in turn buy shares in China, Hong Kong and Taiwan (China region).
“We get consistent inflows …
Investors who are smart adding more, many people wait for the fence to invest in China.
July is one of the best months for inflows in the Chinese Fund Greater.
Even this August and this month has seen a good current , “said Niranjan Avasthi, head of product, marketing and digital at Edelweiss MF.
Axis MF also saw a stable increase in investor interests and the funds had recorded net inflows from the start.
“The largest category in these funds is adult investors, who have an understanding of what the role of allocation to China in their portfolio.
Informatan information also realizes that even though the Chinese market has given a decent return, has been very fluctuating historically,” said Ashwin Patni, Product Head and alternatives at Axis MF.
Edelweiss funds have around 20% of exposure to the technology sector, which faces the burden of suppression of regulations.
“China wants to reduce monopoly, map clear paths along with several social aspects.
The story of China shifted from the economy driven by exports to …
The mainland China market will also be added to the market index that emerged, because the global inflow will increase further, “Avasthi said, adding that pain in the technology sector must pass a year.
“China has a very high environment.
But it is also a market that has a very heavy trader component, which is why we see up and down from time to time.
So, investors who come without this context can be delayed,” said Patni.
At present, global funds are small, Chinese even smaller space.
However, investment in the international market will increase gradually and can reach 10% of equity allocation in several years, according to Patni.
A Goldman Sachs report released last week also quoted economists who said China was still not continuous because regulations would not structurally interfere with the company’s income.
Edelweiss Fund, launched in 2009, has posted a return of 20% (compound annual growth rate, or CAGR) in the last 5 years, which has helped attract investors looking for better returns in the past half a year.
Aum from Edelweiss Fund has soared from around RS 152 Crore at the beginning of a pandemic to more than 1,800 crore Rs this month.
On Friday, the Navi Mutual Fund supported by Sachin Bansal was also submitted for FOF which focused on China with a market regulator of Sebi, which would make it a third mutual fund scheme like in India.