Summary
- Heavy underperformance in Q2: Average returns of 3.46% lag the iShares MSCI China ETF by -3.15%, with just 11.5% of funds outperforming.
- Key Industry Level Positioning Costs Managers: At the industry level, 2.3% of underperformance was observed across Internet Software/Services, Alcoholic Beverages, and Banks.
- Tencent Underweight Costly: Tencent’s -7% underweight caused a significant -1.11% of underperformance. Additional losses stemmed from Kweichow Moutai and Cash overweights, while underweights in Li Auto and Yum China Holdings helped recover some relative performance.
- Active vs Passive: Whilst High Active China funds still outperform over the longer term, shorter-term performance is starting to suffer, with 72% of funds underperforming the benchmark over a 3-year period.
For more analysis, data or information on active investor positioning in your market, please get in touch with me on steven.holden@copleyfundresearch.com
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