Greater access to Chinese companies, reasonable valuations and a boom in domestic consumption are three reasons put forward that mark China out as a place to invest, according to Lowcock.
However, he warns investors should pick their stocks “with care” as the country transitions from a global exporting nation to one centred on the domestic consumer with mobile internet, cars and air travel all growing.
Lowcock said: “Investors considering investing in China should tread with caution, the fact that many western companies have tried and failed to crack China should act as a reminder. But now investors can access domestic Chinese companies that could all change.
“Domestic consumption is growing at a rapid pace, but the issue is that China has a rapidly ageing population and rising debt. The country could be running out of time and money, and get old before it gets rich. Investing in China is not for the faint hearted.”
Among the threats facing China are its falling workplace population, which is expected to fall by more than 30 million by 2027, more than the total working population of the UK, and the prevalence of state owned enterprises and debt which was more than 250% of GDP by 2015.
Investors willing to have “high octane exposure” to China could opt for funds such as the GAM Star China, an active fund overseen by Michael Lai which gives investors access to Chinese growth but is also exposed to any market sell-offs, Lowcock said.
He also suggested the JP Morgan Emerging Markets Income fund for more cautious investors due to its focus on quality, value-stocks.
