First State: China consumer story 'flogged to death'

First State's Asia Pacific and global emerging markets team, led by Angus Tulloch, says the China consumer demand story has been "flogged to death."

The team has had a bias towards consumer stocks for a number of years as part of the defensive positioning of its Asia Pacific and global emerging markets portfolios. However, it is beginning to cut exposure to consumer-orientated stocks on valuation grounds. Alistair Thompson, co-manager of the £4.4bn Asia Pacific Leaders fund, says: "If any investment story has been flogged to death it is Chinese consumption. "These stocks have been trading on excessive valuations and we now have very little exposure there." The fund has just 6.7% invested in China compared to the benchmark's ...