How to Invest in China's Year of the Snake

CHINA FOCUS: Investment trusts, OEICs and ETFs for gaining exposure to the volatile land of Eastern promise

Jackie Beard, FCSI 7 February, 2013 | 6:24PM Holly Cook
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On 10th February we enter the year of the water snake, according to the Chinese Lunar calendar. One of five snakes—the others being wood, metal, fire and earth—the water snake last reared its head in February 1953. That’s the year in which Chairman Mao Zedong introduced the five-year plan in an attempt to boost Chinese industry. Each factory or mine was given an output target and failure to meet these targets was seen as failing the Chinese people. It’s also the year in which all private companies were brought under state control.

Under Chinese Taoist philosophy, water is representative of intelligence, wisdom and flexibility. These are important characteristics we look for in a manager when researching funds at Morningstar.

Roll forward some 60 years and it’s a very different picture. While there are still many state-owned firms, there are an increasing number of listed businesses in which foreigners can invest. Indeed, there are some 350 funds investing in Chinese equity that are available for sale in the UK, spanning all vehicle structures. Our analysts have assigned opinion-based ratings to 21 of these OEICs, investment trusts and ETFs.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Fidelity China Focus A-Dis-GBP6.35 GBP-0.08Rating
Fidelity China Special Ord327.51 GBP0.46Rating
FSSA Greater China Growth A GBP Acc12.00 GBP0.86Rating
JPMorgan China Growth & Income Ord538.12 GBP1.53Rating

About Author

Jackie Beard, FCSI

Jackie Beard, FCSI  is Director of Manager Research Services, Morningstar EMEA