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As the world’s second largest and fastest growing equity market in terms of capitalization , China offers an ever-increasing array of investment opportunities. In a country that’s undergoing massive structural reforms in the quest to achieve internally-generated sustainable growth, not all opportunities are created equal. Some sectors will inevitably perform better than others.
That is why investing in the Excel China Fund might be a good way to capture growth in companies that are benefitting from structural shifts and capacity rationalization in the economy, compared to investing in the broad Chinese market. The fund is positioned to capture the growth of the some of the best companies in China because it is managed on-the-ground by China AMC, one of the largest asset managers in China. The Managers at China AMC have first-hand knowledge of companies that will benefit from secular growth trends in the country.
The growth trends in China have dramatically shifted over the last decade. Sectors such as Healthcare, Education, Environmental Protection, Technology and Domestic Consumption have benefited , in particular, from the evolution of the “new China” economy. These multi-year secular themes, in our opinion, have high growth potential and pricing power and are less correlated to GDP growth.
Some of the growth stocks in which the Excel China Fund invests are among the world’s best in their respective space and are expected to deliver potentially decent returns. For example, Tencent is the largest gaming company in the world, and also operates an elaborate social networking platform that combines all facets of daily life, such as banking, social interaction, eatery, news, etc., into one central app. The company has diverse, sustainable revenue streams and is not completely dependent on ad revenues . Another example is Alibaba, which is often referred to as the Amazon of Asia. It has displaced Walmart to become the world’s largest retailer and generates more sales than Amazon on any single day. And a third example is New Oriental which is capitalizing on the increasing focus on education in China. It is the largest and most recognized provider of private educational services in China, with an extensive network schools, learning centers and book stores – both on-line and bricks and mortar.
With reforms continuing to gain a stranglehold on China, the Excel China Fund is dedicated to separating the “wheat from the chaff” and offer you the opportunity to benefit from the growth of the best companies in China.
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