LONDON (Alliance News) - JPMorgan Chinese Investment Trust PLC said Monday it outperformed its benchmark in its first half, having changed its benchmark to the MSCI China Index during the period.
The trust posted a total return on net asset value of 6.8% for the six months ended March 31. JPMorgan Chinese Investment said this compared favourably with the 6.2% return in sterling terms of its benchmark for the period, which was a combination of the MSCI Golden Dragon Index before January 26 and that of the MSCI China Index from January 26 onwards.
This combination was due to the fact that, at the trust's annual general meeting in January, it changed its benchmark to be the MSCI China Index, it said.
Over the total period, the trust's previous benchmark, the MSCI Golden Dragon Index had outperformed it, with a total return of 8.4% in sterling terms.
"Overall, the Chinese government is having to find ways to adjust to the pace of slower growth while running down the excessive capacity in the manufacturing industries. The policy shifts over the past year have demonstrated the willingness of the government to address the problems. We continue to expect a pro-growth stance from the authorities although there remains a risk of government tightening sometime in the future," said Chairman William Knight.
"With inflecting growth data and the resulting potential for upgrades in earnings for economically-sensitive sectors, we believe the China markets should continue to recover gradually from the plunge they suffered earlier this year. As at the end of March, our managers increased their overweighting in China stocks, by consolidating some positions in Hong Kong and Taiwan and shifting the capital towards higher conviction stock ideas in China," Knight added.
"In essence, the portfolio continues to emphasise secular growth and to this end our managers have taken advantage of the market correction earlier in the year as buying opportunities to add to the existing names in the portfolio which they like and to initiate positions in new investments, rather than to align the portfolio's country exposures more closely to that of the MSCI China benchmark," the chairman said.
Shares in JPMorgan Chinese Investment were down 1.0% at 151.41 pence on Monday afternoon.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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