Funds under review
In this article, we’ll compare the performance of four China-focused mutual funds. They include the following:
- The Clough China I Fund (CHNIX)
- The Fidelity China Region Fund (FHKCX)
- The John Hancock Greater China Opportunities Fund (JCOAX)
- The Matthews China Investor Fund (MCHFX)
For the seven-day period ended September 2, 2015, the week-over-week returns of the four mutual funds barely changed. Weekly returns of CHNIX, FHKCX, and MCHFX were negative, while JCOAX returns were marginally positive.
China’s stock market crashed on August 24, 2015, and the effect of the crash is clearly visible in one-month returns. For the one-month period ended September 2, 2015, none of the four funds posted positive returns. CHNIX posted the least negative returns at -12.7%, followed by JCOAX with returns of -14.9% and MCHFX with returns of -15.7%. FHKCX was impacted the most, posting returns of -18.2%.
The stock market meltdown also negatively affected the three-month period ended September 2, 2015. FHKCX was the worst performer of the four funds, posting returns of -34.0%. Taiwan Semiconductor Manufacturing (TSM) and Tencent Holdings (TCEHY) are included in the top ten holdings of FHKCX, according to its July 2015 portfolio.
The situation of negative returns continues in the one-year period ended September 2, 2015. FHKCX has underperformed all of its peers in terms of returns, returning -16.4% in the period. MCHFX and JCOAX shared second-to-last place at ~-14.0% returns. CHNIX returns were down by 11.1%.
In the third part of this series, we’ll take a look at the Official Purchasing Managers’ Index to get a sense of where China’s manufacturing sector is headed.