Though many investors have become increasingly nervous about the stability of the region in light of China’s credit downgrade, Shiao believes President Xi Jinping’s “supply-oriented reform process” will steer the country in the right direction, allowing China’s consumer segment to flourish.
Consumer-related equities are a running theme in his £304.2m Invesco Perpetual Hong Kong & China Fund, for instance.
This encompasses a significant overweight in both consumer staples and consumer discretionary sectors, and positions in other areas tangential to consumers like technology and healthcare.
It also includes positions in “special” consumer segments like the automobile industry and tourism.
Shiao said: “We favour the automobile industry, among others, although we are focused on the suppliers. Chinese automobile manufacturers still lack competitive home-grown talent, working instead with joint ventures.
“This is not the case for suppliers, which export their goods and supply the likes of BMW in the US.
“The tourism industry is also attractive to us – not just because more and more Chinese are travelling abroad, but because an increasing number of visitors are coming to China.”
