China investments

Grenage

aroominyork said:

Grenage said:

eastmidsaver said:

i'm just wondering if anyone has been tempted to "buy the dip".... or do you think it is still a bit too risky due to the recent chinese government interventions?   

I bought a little Alibaba.

How much did his Dad want for him?

A steal at two camels and a goat.

Thrugelmir

Grenage said:

aroominyork said:

Grenage said:

eastmidsaver said:

i'm just wondering if anyone has been tempted to "buy the dip".... or do you think it is still a bit too risky due to the recent chinese government interventions?   

I bought a little Alibaba.

How much did his Dad want for him?

A steal at two camels and a goat.

In China the state can simply take him if it so wishes. 

Grenage

Thrugelmir said:

Grenage said:

aroominyork said:

Grenage said:

eastmidsaver said:

i'm just wondering if anyone has been tempted to "buy the dip".... or do you think it is still a bit too risky due to the recent chinese government interventions?   

I bought a little Alibaba.

How much did his Dad want for him?

A steal at two camels and a goat.

In China the state can simply take him if it so wishes. 

You're not wrong.

Alexland

MaxiRobriguez said:

Developed world tracker would be enough to suit the majority of investors, giving a good return through reasonable diversification.
Absolutely do not "need" China in a portfolio, and thinking about it I might try and reduce my allocation over time as I don't need the large returns that I seek from EM in order to meet my portfolio goals.

Just over 3 months later the unit price on my workplace pension EM fund is looking somewhat better so it just got dumped. I wasn't happy with China on a number of issues (ownership, human rights, etc), there seem to be increasing tensions over Taiwan (although I doubt any country would take action to disrupt semiconductor supply) and even India's position at the climate change conference was unsatisfactory. I might be missing out on some potential growth and diversification but it's not for me. There will be some exposure to these areas via developed world listed companies such as unilever etc. As I didn't want to take on any more US exposure it does mean my UK home bias is now at VLS levels.

noclaf

My old work pension is in a BG fund that has around 30% exposure to EM. The fund has done reasonably well last year and especially in the last 3-5 years. Overall the EM in the fund represents less than 9% of my total pensions.

The increased political tensions with China is slightly concerning and can't see it getting any better with the Spratly Islands and Taiwan issues but I've resisted any knee jerk reactions.  Would it be fair to assume that BG will/should have a better understanding (than me) of how the politics and their investment decisions intertwine so I should probably leave it to them to worry and get on with life...?

Alexland

noclaf said:

Would it be fair to assume that BG will/should have a better understanding (than me) of how the politics and their investment decisions intertwine so I should probably leave it to them to worry and get on with life...?

Unless the fund has an ESG consideration they will likely just be focused on returns. Even if there are some ESG criteria how do they match with your own views on human rights and environmental damage? There are likely many in the US and some in the UK who would even go as far as to consider China our common enemy. What if the communist government decide they have had enough western investment and declare that, in accordance with their existing laws, the Variable Interest Entity structure loophole is illegal and you actually have no ownership rights in these businesses? How do you expect BG to have managed that sort of risk?

Linton

noclaf said:

My old work pension is in a BG fund that has around 30% exposure to EM. The fund has done reasonably well last year and especially in the last 3-5 years. Overall the EM in the fund represents less than 9% of my total pensions.

The increased political tensions with China is slightly concerning and can't see it getting any better with the Spratly Islands and Taiwan issues but I've resisted any knee jerk reactions.  Would it be fair to assume that BG will/should have a better understanding (than me) of how the politics and their investment decisions intertwine so I should probably leave it to them to worry and get on with life...?

I know nothing about how BG works, but I would be astonished if they did not take into account all the risks associated with their investment choices.  That is basic investing.  Of course they may not share your assessment of the risks.

Given China's importance in the world economy the ramifications of any major political problems are unlikely to be limited to the one country and its neighbours.

noclaf

Alexland said:

noclaf said:

Would it be fair to assume that BG will/should have a better understanding (than me) of how the politics and their investment decisions intertwine so I should probably leave it to them to worry and get on with life...?

Unless the fund has an ESG consideration they will likely just be focused on returns. Even if there are some ESG criteria how do they match with your own views on human rights and environmental damage? There are likely many in the US and some in the UK who would even go as far as to consider China our common enemy. What if the communist government decide they have had enough western investment and declare that, in accordance with their existing laws, the Variable Interest Entity structure loophole is illegal and you actually have no ownership rights in these businesses? How do you expect BG to have managed that sort of risk?

I suspect there is no ESG element in the fund, it's a Global Equities Growth fund and would expect the description to contain a ref to ESG for example, I use a ESG Dev world tracker in my current workplace pension and the description clearly contains ref to 'ESG'.
re Human Rights and Environmental question, I can't accurately answer as don't have that level of detail on the firm's in China that the fund invests into...saying that not all of China's actions align with my views and my basis for that statement is not just limited to the 'mainstream' news stories, more concerning for me is their influence in other smaller countries with less than exemplary human rights records (I happen to have family in those places too), their sphere of influence and how far-reaching it is and what they are trying to do with it....certainly worrying.
To bring back on topic and BG, re the ownership point, I don't think they could do anything.to be honest. If China makes a decision and.knowing how ruthlessly it will be executed not sure BG or anyone else could do much about it.
I may need to consider if selling and then merging the old pension funds into my current scheme might be the best way forward. 

Thrugelmir

noclaf said:

My old work pension is in a BG fund that has around 30% exposure to EM. The fund has done reasonably well last year and especially in the last 3-5 years. Overall the EM in the fund represents less than 9% of my total pensions.

The increased political tensions with China is slightly concerning and can't see it getting any better with the Spratly Islands and Taiwan issues but I've resisted any knee jerk reactions.  Would it be fair to assume that BG will/should have a better understanding (than me) of how the politics and their investment decisions intertwine so I should probably leave it to them to worry and get on with life...?

China is a region where active manangement produces far greater returns than passive benchmarked against MSCI. Was reading over the weekend that 51 companies on the Hang Seng have been suspended for a failure to publish their annual accounts on time this year. A clear illustration of how markets are in reality very different to each other in terms of corporate governance etc. 

tebbins

Part of the cause of that is the drastic effects of holding different share classes.
I am perfectly happy to own a tiny peice of China via a global index fund and to access earnings generated in China via other financial markets. For example the FTSE 100 generates around 13% of its earnings in China. Let the companies take the risks, they have the resources to manage it, you don't.