$49 Billion Fund Loads Up on Chinese Shares

$49 Billion Fund Loads Up on Chinese Shares

By Ruth Carson  and Adam Haigh
July 6, 2018, 12:00 AM GMT+8 Updated on July 6, 2018, 3:19 PM GMT+8

A bear market, the yuan’s worst month since 1994, and a looming U.S.-China trade war all suggest one thing to John Pearce. Buy Chinese equities.

The selloff in the Shanghai Composite Index, down more than 20 percent from its January high, is overdone, and investors have read too much into the yuan’s depreciation, said the chief investment officer of UniSuper Management Pty, which controls A$67 billion ($50 billion) of assets primarily for Australia’s higher education and research sector.

“We have used the latest sell-off to build a position in China A shares,” Pearce said in an interview. “It’s all on the back of tightening U.S. dollar liquidity and fears of a trade war but we it looks overdone to us.”
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“People are just getting a bit too carried away by it all,” Pearce said. “If you look at the history of any major stock-market – and China is a massive market – if you had blindly just bought the market after a 20 percent selloff, more often than not you’ve made money in 12 months time.”

More details in https://www.bloomberg.com/news/articles/...ese-shares

(06-07-2018, 04:15 PM)cyclone Wrote: “People are just getting a bit too carried away by it all,” Pearce said. “If you look at the history of any major stock-market – and China is a massive market – if you had blindly just bought the market after a 20 percent selloff, more often than not you’ve made money in 12 months time.”

Not for the China A share market. Most investors who bought the selloff back in 2015 are likely still in the red after 3 years, never mind 12 months.

The Nikkei is also still way down from the bubble highs in the 90s.

(06-07-2018, 05:31 PM)lilvestor Wrote:

(06-07-2018, 04:15 PM)cyclone Wrote: “People are just getting a bit too carried away by it all,” Pearce said. “If you look at the history of any major stock-market – and China is a massive market – if you had blindly just bought the market after a 20 percent selloff, more often than not you’ve made money in 12 months time.”

Not for the China A share market. Most investors who bought the selloff back in 2015 are likely still in the red after 3 years, never mind 12 months.

The Nikkei is also still way down from the bubble highs in the 90s.

His fund will be in the red pretty badly if China goes the way of Japan like I am expecting. 

Export orders are already getting negative, but worldwide markets seem to be shrugging off the trade war. Go figure