uploads///Performance of China Focused Mutual Funds

SSE Composite Index Was Flat as NPC’s Annual Meeting Ended


Mar. 21 2016, Updated 8:22 a.m. ET

Shanghai Stock Exchange Composite Index rose

The Shanghai Stock Exchange (or SSE) Composite Index was almost flat from March 9–March 16, 2016, and ended at 2,870.43 points on March 16. This occurred after China’s National People’s Congress (or NPC) wrapped up its annual two-week meeting on March 16 by approving its 13th Five-Year Plan. The NPC pledged that the Communist Party will take all necessary stimulus measures to boost the slowing economy.

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Although Li Keqiang, the Chinese premier, assured that there is no danger of a hard landing, he did acknowledge that the economy was facing difficult times. He said, “We are fully confident of China’s long-term economic growth. The confidence is not from nowhere as we are confident that as long as we continue to reform and open up, China’s economy will not suffer a ‘hard landing’.”

China’s 13th Five-Year Plan and Charity Law passed

The NPC approved the 13th Five-Year Plan for 2016 to 2020, which aimed to accelerate China’s economic growth. The plan aims to maintain growth at an average of 6.5%–7.0% per year by 2020. According to the plan, China expects its GDP to rise to 92.7 trillion yuan ($13 trillion) in 2020 from its existing 67.7 trillion yuan ($10.4 trillion).

The NPC also passed the Charity Law on March 16, which would be implemented in September 2016. The Charity Law focuses on regulating the management of charitable institutes and guarantees tax benefits for charitable activities. The reason for passing the Charity Law was mainly to reduce poverty and cultivate the culture of giving.

Return on China-focused mutual funds

From March 9 to March 16, the Matthews China Fund (MCHFX) turned out to be the best performer and was up by 2.0%.

The returns of the Fidelity Advisor China Region Fund – Class A (FHKAX), the John Hancock Greater China Opportunities Fund – Class A (JCOAX), and the Oberweis China Opportunities Fund (OBCHX) rose by 1.9%, 1.7%, and 1.5%, respectively.

Meanwhile, the Clough China Fund – Class A (CHNAX) was up by 1.3% for the same period.

From March 9 to March 16, American depositary receipts (or ADRs) of Chinese tech giants JD.Com (JD), Baidu Inc (BIDU), Alibaba Group Holding Limited (BABA), and 58.Com (WUBA) were up by 5.7%, 3.7%, 1.5%, and 0.2%, respectively.

In the next article, we will look at China’s industrial production data.


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