A New York-based emerging markets equities fund that has outperformed most of its peers has been adding to its Chinese stock holdings in recent months, as it deemed this year’s relentless selling to be overdone.
Pzena Emerging Markets Value Fund boosted the weighting of China and Hong Kong stocks to around 33% of its portfolio in the third quarter, up about four to five percentage points, according to a Bloomberg Intelligence note. That compares to 29% in MSCI Inc.’s gauge of EMs.
“The indiscriminate selling of Chinese stocks has increased the value opportunity,” Allison Fisch, a money manager at the $1.5 billion fund, said in an email. “We’ve been taking advantage by buying up companies we believe are exceptionally cheap relative to their normalized earnings power.”
Fidelity China Special Situations PLC (LON:FCSS), the UK’s largest China Investment Trust, capitalises on Fidelity’s extensive, locally-based analyst team to find attractive opportunities in a market too big to ignore.