Fidelity Advisor China Region A

Hedge fund managers have expressed mixed opinions about the Chinese economy. China’s total debt-to-GDP ratio is currently in the range of 240%–270%, compared to 150% a decade ago.

China’s aggregate financing also fell sharply from 3417.3 billion yuan ($525 billion) in January to 780.2 billion yuan ($120 billion) in February.

The rise in new yuan loans doesn’t directly impact the overall performance of mutual funds. But with the rise in credit flow in the economy, mutual funds with large exposures to financials benefit.

Fixed-asset investment is considered a key driver of China’s economic growth. China’s urban fixed-asset investment grew by 10.5% YoY to 13,259.2 billion yuan in the first four months of 2016.

In this series, we’ve reviewed eight China-focused mutual funds in terms of their performance and portfolio composition. The Fidelity Advisor China Region Fund – Class A (FHKAX) was the largest fund according to asset size.

The SSE Composite Index rose by 4.3% from February 25 to March 3, 2016, after the PBoC announced its fifth rate cut since February 2015.

The Fidelity Advisor China Region Fund – Class A (FHKAX) is the largest fund by net assets. According to the latest available data for January 2016, it had portfolio assets of $1.05 billion with a net expense ratio of 1.28%.

The capital investment and industrialization-driven era that led the economy to growth before and after the subprime crisis has taken a back seat.

The Caixin China Manufacturing PMI (or purchasing managers’ index) came in at 48.4 in January, slightly up from 48.2 in December.

China’s currency is flowing out of the economy. With the rate hike looming in the US, Chinese investors are parking their funds in dollar-denominated assets.