Private Fund Sector is rising

by finandlife14/11/2017 08:25

One of Yang Yong’s stock funds surged 304 percent in a year by investing in a handful of China’s largest companiesHe is managing about 105 million USD. 

Private fund market size of China: 1.6 trillion USD. Amount is among 4,290 private funds with similar strategies.

To Yang, China has become a prime market for investing in quality consumer-focused companies capable of delivering sustainable earnings over long periods. 

Chinese shares from the mainland and Hong Kong to the U.S. have advanced this year amid strong earnings and economic data. But performance has diverged, with a gauge of small caps trading near the lowest versus a measure of large caps since 2015.

He bought them betting that lower valuations in Hong Kong would attract Chinese inflows

Private funds have no concentration limits, unlike mutual funds that can’t have more than 10 percent of assets in any one stock. 

As economic growth slows, the country’s larger companies will outperform, making it more attractive to buy funds investing in listed stocks.

In 2014, he started his own company, where he provided credit to investors for stock trading, but he had to close the business just a year later as regulators cracked down on leverage during the market crash. 

“In the stock market, you just have to stick to a theory -- the right theory -- and you can make a lot of money,”

 

Bloomberg

Tags:

Economics

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