The latest trend of Bridgewater Fund! Chinese assets are suddenly good news

Foreign giants are increasing their positions in Chinese assets.

Global hedge fund giant Bridgewater's onshore China hedge fund increased its exposure to Chinese stocks and bonds after a rally in risk assets pushed its first-quarter return of 6.4%, outpacing most local rivals, according to the latest news. Bridgewater founder Ray Dalio has previously said that Chinese assets are cheap. "For me, the key question is not whether I should invest in China, but how much I should invest."

Another foreign asset management giant, Ashmore, is also reducing its exposure to Indian equities and making China its top investment choice for its emerging markets fund. According to Bloomberg, the fund allocated 26% of its emerging market equity fund to China, while cutting India's share to 12%.

At the same time, foreign investors' expectations for China's economic prospects are also improving. Qiao Hong, chief economist of Greater China and head of Asian economic research at BofA Securities, said in the latest report that China's GDP growth forecast for this year was raised from 4.7% to 5% due to the better-than-expected GDP and fixed asset investment data in the first quarter.

Increase positions in Chinese assets

On April 19, local time, Bloomberg reported that Bridgewater's onshore China hedge fund increased its exposure to Chinese stocks and bonds, after a rebound in risk assets pushed its first-quarter return of 6.4%, outpacing most local competitors.

Bridgewater's Shanghai-based private equity fund management subsidiary told investors that in the All Weather Plus strategy, the all-weather portfolio contributed 3.8 percent during the period, when policymakers ramped up support for the local economy and markets, and the active management portion of its team contributed 2.1 percent of the gains.

According to the data, Bridgewater was registered as a private equity manager with the Asset Management Association of China on June 29, 2018.

According to information from the Asset Management Association of China, Bridgewater (China) Investment Management Co., Ltd. has a registered capital of 310 million yuan, and the company has 57 full-time employees, of which 51 have obtained fund qualifications. Currently, the legal representative and general manager of Bridgewater (China) is Joanna Sun Alpert.

According to a Reuters report, in January this year, Bridgewater (China) raised a new fund of 2 billion yuan, increasing its assets under management in China to 40 billion yuan, marking a doubling of assets in the past year and leading the private placement of wholly foreign-owned securities.

In a weak market, stable performance is an important reason for Bridgewater (China) to attract customers. According to the report, the fund's All Weather Plus strategy, a flagship RMB-denominated product that invests in stocks, bonds and commodities, returned 10.3% last year. Since the beginning of this year, as of April 3, its performance has also significantly outperformed the CSI 300 index.

Recently, Bridgewater founder Ray Dalio explained on social media why he continues to invest in China, arguing that the Chinese market is essential for "understanding the world" and "diversifying".

"For me, investing in China has had all the success I'd like to have, including showing investors how to do well in both bear and bull markets," Dalio said. ”

He also stressed: "There is no such thing as a bad market, only bad decision-making. The Chinese market is suitable for my type of decision-making. ”

"Chinese assets are cheap. "For me, the key question is not whether I should invest in China, but how much I should invest." ”

Dalio's optimism about China and Bridgewater's positive performance have also led to a rapid increase in the scale of Bridgewater's assets under management in China.

Smell something?

According to a recent report by Bloomberg, another foreign asset management giant, Ashmore, is reducing its position in Indian equities and making China its top investment choice for emerging market funds. The company believes that the Indian stock market is overhyped and overcrowded, while the Chinese stock market is expected to rebound.

According to the report, Edward Evans, a portfolio manager of emerging markets equities in London, said that the fund invested US$6.5 billion (about 47 billion yuan) in emerging stocks, allocating 26% of its emerging market equity fund to China and reducing India's proportion to 12%. He believes that the difference in valuation is the main reason for this decision.

According to reports, Ashmore Group plc is an emerging market professional asset management company (London Stock Exchange stock code: ASHM), according to its latest disclosure of the quarterly report ended March 31, 2024, the company's net outflow in the quarter was about 2 billion US dollars, reducing the AUM from 54 billion US dollars at the end of December last year to 51.9 billion US dollars (about 380 billion yuan).

There are signs that global funds are flowing back to the Chinese market. Morgan Stanley and other foreign institutions have released reports pointing out that global funds are showing a trend of returning to the Chinese stock market. More than 90% of emerging market funds are starting to increase their holdings in Chinese equities, according to HSBC Holdings.

Analysts believe that from a global perspective, the current A-share valuation depression, investment value is more prominent, which may be one of the important reasons for the return of international funds, China's economy continues to release recovery signals, but also further boosted the confidence of international investors.

It is worth noting that on April 18, Eastern time, the FTSE China 3x Long ETF (ARCA: YINN) bucked the trend and soared, and as of the close of the day, the ETF rose more than 5%.

It is reported that the benchmark index tracked by the ETF is the FTSE China 50 Index, which consists of the 50 largest and most liquid Chinese stocks (H-shares, red chips and P chips) listed and traded on the Hong Kong Stock Exchange.

Another foreign giant announced

Qiao Hong, chief economist of Greater China and head of Asian economic research at BofA Securities, said in the latest report that China's GDP growth forecast for this year was raised from 4.7% to 5% due to the better-than-expected GDP and fixed asset investment data in the first quarter.

The report mentions that manufacturing and infrastructure investment are expected to remain resilient in the coming months, thanks to policy support measures.

The report pointed out that the GDP data for the first quarter of 2024 has risen significantly, and China's economy is more likely to achieve its full-year growth target of "about 5%". Despite continued weakness in the property sector, strong infrastructure and manufacturing investment drove a better-than-expected rebound in investment last quarter. Looking ahead, policy support, such as the issuance of special sovereign bonds and trade-in programmes, is likely to play a gradual role in the coming months to support investment momentum.

In the past quarter, China's economy delivered a report card that exceeded expectations. According to data released by the National Bureau of Statistics, China's GDP grew by 5.3% year-on-year in the first quarter.

Subsequently, Morgan Stanley announced that it would raise China's economic growth forecast for this year by 0.6 percentage points. China's exports were strong in the first quarter, the manufacturing sector performed well, and China's economy is expected to achieve strong growth throughout the year, the foreign institution said.

Prior to this, Goldman Sachs and Citi also issued reports respectively saying that China's economy will start well in 2024, and it is expected that the GDP growth target set by the Chinese government of "about 5%" can be achieved, and the forecast for China's GDP growth in 2024 will be raised. Among them, Goldman Sachs raised from 4.8% to 5.0%, and Citi raised from 4.6% to 5.0%.

Column Editor-in-Chief: Qin Hong Text Editor: Lu Xiaochuan Title Image Source: Shangguan Title Map

Source: Author: Brokerage China