Infore China Advantage Fund

Focused on key assets of China, anchored in long-term and stable returns.

Product Introduction

The fund will follow our high-conviction investment philosophy, which involves strategically allocating to industries with comparative advantages in China based on a global industry analysis. We firmly believe that these companies represent the global comparative advantage of China’s economy and will be the most accessible and likely source of excess returns.

Industry Selection

We undertake comprehensive analysis considering factors such as industry growth potential, competitive structure, barriers to entry, and technology evolution with a focus on Chinese industries with long-term competitive advantages on a domestic and global scale. Currently, we believe that many of China's large consumer sectors are benefitting from these scale advantages and selectively are seeing upgrades. Consequently, they provide many individual opportunities for the new fund. We are prioritising the food and beverage, E-commerce, social media, financial services, healthcare and EV sectors.

In China's advanced manufacturing sectors, we can find many companies with significant scale and cost advantages, with world-leading technology and good management teams. Consistent with our core investment philosophy, we will prioritise our investment in these sectors in companies where we can also identify undervaluation. Here, we are prioritising the automotive and battery manufacturing sectors, renewable energy, communication equipment, semiconductor, home appliance, industrial automation, and industrial material manufacturing sectors.

Asset Allocation

We expect that China A shares will comprise 60-80% of the portfolio, with the remaining 20-40% allocated to Hong Kong (H shares) and leading Chinese companies listed in the US. The initially targeted overweighting of H shares reflects the extreme undervaluation of this market in an absolute sense, but also the fact that in some cases, where the same business is listed on both exchanges, the H share listing is typically valued at a significant discount to the A-share listing. The manager believes that this arbitrage is unusual and will close when international investor sentiment towards China improves.

Key Considerations