China Equity
Seeking to deliver long-term outperformance through a contrarian style and absolute return mindset.
Reasons to invest
Strong, stable team with long-term track record
The Asia ex-Japan Equity team has a lot of experience covering the asset class and has worked together for more than a decade.
Large and liquid, with likely increasing importance in key benchmarks
The China A-share market is the second largest globally by market cap, liquidity and turnover.
Low correlation
Low correlations to other global stock exchanges, offering risk-adjusted diversification benefits.
Inefficiencies
Capital structure inefficiencies provide opportunities to add alpha opportunistically.
Contrarian style is differentiated
A contrarian style and absolute return mindset that we believe works well in volatile and inefficient markets.
Appropriate ESG integration
Effective engagement with companies open to improving their ESG profile.
Overview
By investing with high conviction in companies leading the sustainability transition, we target financial outperformance and positive outcomes.
Sandy Pei
- Co-portfolio manager
How we invest
High-conviction, bottom-up process industry screening and thematic research
Our portfolio is concentrated, and stocks are selected through bottom-up analysis based on fundamental research. We seek attractive price-to-value propositions, prioritising the asymmetry of potential returns over both the absolute upside of the investment, and quality of the company.
Active engagement to bring about change
Having invested substantially in our engagement resources, we are committed to achieving positive ESG outcomes for our clients. We do not limit our investment to the best ESG-rated companies, which are often expensive and where scope for improvement is, by definition, limited.
Robust risk management framework
We consider risk at the stock and portfolio level, using a combination of proprietary and third-party tools. We use independent and internal monitoring.
Investment philosophy and process
Reducing 7,500 stocks to a high conviction portfolio of 30-60 holdings:
Team
6250, 6254, 6249
Jonathan Pines, CFA
Lead Portfolio Manager, Asia ex-Japan, Federated Hermes Limited
Sandy Pei, CFA
Deputy Portfolio Manager, Asia ex-Japan, Federated Hermes Limited
Product Information
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