China's economy - the second largest in the world - is in the midst of a transformation from an investment-led to a consumption-led model.
The shift away from low-cost labour-intensive production, towards advanced manufacturing and green tech is creating a wealth of unique and compelling investment opportunities.
China's growth rate may be slowing following years of breakneck expansion, but it is forecast to significantly outperform most developed markets in 2023. ‘Looking at the short-term, China is the only major economy that is going to grow meaningfully from a low base this year.' Says Sandy Pei, Co-portfolio Manager, Federated Hermes.
Beijing's abandonment of its strict zero-Covid policy at the turn of the year has boosted the economy, which has rebounded strongly. It is one of several factors that underpin the attraction to Chinese equities at present. The government has also thrown its weight behind a raft of measures to boost growth. Many analysts forecast full-year growth of more than 6%.
Federated Hermes China Equity, which seeks to deliver long-term outperformance through a value-led contrarian style and an absolute return mindset, is uniquely well-positioned to tap into the opportunities available to global investors in Chinese equities.
Read the case for Chinese equities in charts from Sandy Pei, CFA, Deputy Portfolio Manager, Asia ex Japan.
This advert is for professional investors only. The value of investments and income from them may go down as well as up, and you may not get back the original amount invested. Any investments overseas may be affected by currency exchange rates. Past performance is not a reliable indicator of future results and targets are not guaranteed.
Investments in emerging markets tend to be more volatile than those in mature markets and the value of an investment can move sharply down or up. The views and opinions contained herein are those of the author and may not necessarily represent views expressed or reflected in other communications. This does not constitute a solicitation or offer to any person to buy or sell any related securities or financial instruments. Issued and approved by Hermes Investment Management Limited ("HIML") which is authorised and regulated by the Financial Conduct Authority. Registered address: Sixth Floor, 150 Cheapside, London EC2V 6ET. HIML is a registered investment adviser with the United States Securities and Exchange Commission ("SEC").
