This week has been a decent week for The Reeves Portfolio’s.
The pick of the week has been Gartmore’s China Opportunities Fund which has provided a 3%* return for the week. So far this year the fund has achieved a 51.88%* return.
This is an established fund (launched 1983) and has achieved top quartile rankings over the last 10 years. The fund may invest in emerging markets, smaller companies and more generally tends to invest within a single market. As a consequence, this type of fund is at greater risk from political and economic factors. Similarly it may be subject to more abrupt price movements than one would be used to within a more traditional UK Equity based fund. Having said this, in exchange for higher volatility an investor should hope to be exposed to greater opportunities for increased returns. Despite the funds name 92% of the share holdings are held within Hong Kong Exchange. 38%** of the funds are currently invested in financials, with a further 11%** in IT and Energy.
There is strong support for investing some money into China – the following text is taken from an article written by Allianz Global Investors***:
• Very aggressive and decisive government policy support has ensured that China is practically the only one of the world’s largest economies currently expanding strongly and the likelihood has increased of 8% real gross domestic product (GDP) growth in 2009.
• A very strong fiscal position and loan growth at more than twice the rate of nominal GDP growth are boosting fixed asset investment which is likely to remain the key driver of economic growth for the next couple of years.
• China’s comparative economic health means spending has focused on infrastructure, the foundation for future economic growth – not on rescuing the financial sector, as elsewhere.
• Through strategic international acquisitions currently, China should emerge from the global downturn even stronger.
• Encouragingly, policies are being implemented to boost longer-term domestic consumption – the key to higher quality, long-term growth.
The Gartmore China Opportunities fund is currently one of 9 funds within The Reeves Independent Aggressive Portfolio which is available to our clients through our WRAP management system. Clients are able to manage their ISA’s, Pensions, Unit Trusts and Bonds through the WRAP system.
*Source of data: Morningstar
**Source of date: Providers own fact sheet as at 31.10.2009
***Source of data: Allianz Global Investors, “China: Building the foundation for long-term economic growth.” Oct 09
This fact sheet is intended to provide general information and does not represent a personal recommendation of the product. The value of investments can fall as well as rise and you may not get back the full amount invested. Past performance is not a guide to future returns. The sections within this fact sheet are opinion only and do not constitute advice. Other charges may be applicable and are subject to change without prior notice. Please refer to our brochure for information on our other products and services.
