“The Chinese stock market could be nearing the point of bottoming out, and investors may be looking at buying opportunities as it does,” he said.
“However, there is concern over economic growth. There is uncertainty over how accurate the numbers are, and you need to look at utilities and energy usage, manufacturing figures and consumer spending, among others, to get a better idea of actual growth.”
Cavaye pointed out that rather than utilising a China-centric vehicle, he would want his Chinese exposure to be complemented by an overarching EM theme in order to pick up on the broader benefits.
“We would not want to use a single-country fund to invest,” he said. “China affects the rest of emerging markets, and any positive trends there will be felt across the spectrum, which we would want to pick up on through a wider emerging markets fund.”
As outlined by Oliver, the innate issue with ‘contrarian’ plays is that once anything more than a very small minority begin to view them as credible, their ‘contrarian’ status is immediately negated.
For now, it seems that China’s influence on wider investor trends is also affecting less orthodox moves. Go straight in or seek a more indirect route is the decision you have to make – but whether it will be a timely one is anyone’s guess.
