Greater China strategy
By identifying factors that can trigger positive change in company fundamentals the Martin Currie Greater China strategy takes a high conviction, stock-focused approach that aims to exploit opportunities resulting from China’s economic transition.
China is in the midst of an evolution. The economy is in transition moving from a manufacturing-led model to a focus on consumer services. The transition is not immediate and the changes involved are both multifaceted and widespread, ranging from anti-corruption measures through to market liberalisation and environmental reform.
A slowing in economic growth over the past 20 years has seen the region falling out of favour with investors. Despite this, China is one of the largest economies in the world and is expected to become the largest over the next five to ten years. It remains under-represented in the global market indices, a situation we expect to gradually change as it opens up its capital market.
The synergies that exist in the region means change in China can also create investment opportunities in Taiwan and Hong Kong. Hong Kong is known for financial services and consumer services companies that can meet demands of emerging middle class in the region. Taiwan offers the world’s best manufacturing expertise and strong product research and development expertise. Such companies will be major beneficiaries as the region enters an era of virtual communication, entertainment and consumption.
Change creates uncertainty for the uninitiated but it creates opportunity, especially for skilled investors, with an in-depth knowledge of the region. Through active management, rooted in fundamental, bottom-up research, we believe our strategy can take advantage of the opportunities that exist in the region.
Our philosophy is to invest in businesses that have long term positive fundamental change, attractive business prospects with competitive advantages, sound financials and the ability to generate both earnings growth and cashflow growth. Quality of management and standards of governance are key when assessing a company’s suitability for inclusion in our portfolio. We seek to acquire these businesses at a reasonable valuation, based on a conservative forecast to derive the intrinsic value of the companies. Our bottom-up and proprietary investment approach allows us to identify, evaluate and exploit companies’ fundamental change at an early stage.
MARTIN CURRIE FOR Greater China
Our investment strategy seeks to deliver capital growth through:
Constructing stock focused portfolios driven by fundamental research, with the risk at a company level not on overwhelming factor tilts
An investment process which focuses on understanding company business models seeking long-term cash generation, responsible management and attractive valuations
Experienced portfolio managers supported by the wider Asia investment team