Do i need a China fund in my portfolio??

csgohan4

Thrugelmir said:

csgohan4 said:

politics should be left in the money savers arms, ethical or not, that is your own personal choice. This is discussing hard cold investments and to dismiss ethical practices may limit your own financial diversity and outcome at your own cost

Political risk has to be considered when investing. Be foolish not to, if one is investing overseas. 

perhaps, but in the context, you could also apply this to the U.S.A as well. In fact you could apply this to every major company. Be it BA and their treatment of staff to Dyson and their decision to move their HQ to Singapore despite voting for the brexit.

Where does it end?
But you cannot apply the same personal morals/ ethics to investments in it's totality, there isn't exactly an organic company to invest in completely are there? Even the most well intention person may have indirectly caused ethical harm, such as the church investing indirectly in gambling companies. 

Again sure if one does't agree with China and their human rights issue, then don't invest, nothing wrong with that, but you will find it difficult not to use something which isn't made in a China sweatshop/factory, the keyboard I am typing this is Made in China. Would you gladly pay RIP off Britain prices for a Made in UK items, most would buy the cheapest

By the same token, it would be foolish also to dismiss less than ethical/moral countries for investments. The UK isn't exactly a shining beacon for the world

Thrugelmir

 csgohan4 said:

Thrugelmir said:

csgohan4 said:

politics should be left in the money savers arms, ethical or not, that is your own personal choice. This is discussing hard cold investments and to dismiss ethical practices may limit your own financial diversity and outcome at your own cost

Political risk has to be considered when investing. Be foolish not to, if one is investing overseas. 

perhaps, but in the context, you could also apply this to the U.S.A as well. In fact you could apply this to every major company. Be it BA and their treatment of staff to Dyson and their decision to move their HQ to Singapore despite voting for the brexit.

Where does it end?

As you said earlier best to send this to DT. As a little knowledge can be extremely dangerous when making broad brush assertions. Not least confusing political risk and commercial operational decisions as one. 

coachman12

Thrugelmir said:

coachman12 said:

OK-----it's "open-season" for all the " let's rubbish coachman" cabal. Have fun and forget the unimaginable suffering that I have outlined above.

Is US business culture ethical ? Treatment of employees is shocking, discrimination is rife. As if the USA is still an emerging market. While not wishing to generalise as have many friends over the pond. There's a significant minority that in their dealings come across as nothing more than objectionable. 

There's a hell of a difference between US objectionable ethics and dealings-----and genocide, torture, forced labour camps, no free speech or media, fake economic statistics, complete totalitarian control of all aspects of life and a host of similar horrific examples that I will not go on about after my last very long post.

coachman12

csgohan4 said:

politics should be left in the money savers arms, ethical or not, that is your own personal choice. This is discussing hard cold investments and to dismiss ethical practices may limit your own financial diversity and outcome at your own cost

In that case, I am very proud of my "personal choice".  Your "hard cold" approach equates IMHO to economically aiding apartheid or, even more dramatic, an Englishman investing in Krupp during WWII.

aroominyork

So there are four issues here. 1) Is it sensible, in constructing a diversified portfolio, to invest an appropriate amount in China? 2) Does the range of available investments provide the exposure you seek? 3) Does the governance of investments in China meet your requirements? 4) Is it ethically acceptable to invest in China?

For me the answers are: 1) Yes. 2) Probably. 3) Overall probably not, but I am hoping my active fund manager is on top of this. 4) I’ll admit I am closing my eyes to this.

And then, how much should you invest in China? I am overweight EM through my sizeable holding in Stewart Investors AP Sustainability (which holds 16% Taiwan but only 4% China) and have about 4.5% of my equities in Invesco China Equity. That China fund is unlikely to make or break my investments either way – which I guess is the purpose of a diversified portfolio – but this thread made me ask myself, if the choice was of either 0% or 10% in China, which way I would jump. Reluctantly, probably 0%.

Thrugelmir

aroominyork said:

So there are four issues here. 1) Is it sensible, in constructing a diversified portfolio, to invest an appropriate amount in China? 2) Does the range of available investments provide the exposure you seek? 3) Does the governance of investments in China meet your requirements? 4) Is it ethically acceptable to invest in China?

For me the answers are: 1) Yes. 2) Probably. 3) Overall probably not, but I am hoping my active fund manager is on top of this. 4) I’ll admit I am closing my eyes to this.

And then, how much should you invest in China? I am overweight EM through my sizeable holding in Stewart Investors AP Sustainability (which holds 16% Taiwan but only 4% China) and have about 4.5% of my equities in Invesco China Equity. That China fund is unlikely to make or break my investments either way – which I guess is the purpose of a diversified portfolio – but this thread made me ask myself whether, if the choice was of either 0% or 10% in China, which way I would jump. Reluctantly, probably 0%.

As far as 3) is concerned definately not. The actual "boss" is the state. 

csgohan4

One could consider VG ESG funds which tries to satisfy certain ethical criteria
https://www.vanguardinvestor.co.uk/investing-explained/ESG-funds

However we are all investing in China, most things we use are Made in China, for better or worse is how you see it. 

MaxiRobriguez

I own an actively managed emerging markets fund which has at times accounted for up to 25% of my pension portfolio. The fund is dominated by a handful of Chinese companies - Tencent, Alibiba, TSMC, Ping and... Naspers which whilst South African makes the majority of it's wealth via Tencent which it is the majority shareholder in. 

I'm comfortable with that exposure because I want that level of exposure to those companies, but I'm under no illusion that my choices may be described by other people as a little reckless. I think for the average person allocation to China is sensible - it provides an additional level of diversification and then doesn't ignore what will become the largest economy in the world in the near future - but perhaps at a smaller allocation, maybe 10%.

Completely ignoring ethical judgements here - that's up to people to decide themselves, there's no correct answer.