OP Kiina

OP-China

Huge dimensions, huge potential

For the past 30 years, the Chinese GDP has grown at an average rate of 10% and the country has already become the new engine of global economy. Notwithstanding, China's true growth story is only about to begin – from the investor's point of view – as the economy's focus is shifting from exports to the domestic market.

  • OP-China offers an efficient method of diversified investing in the Greater China region i.e. in Mainland China, Hong Kong and Taiwan.
  • As the portfolio manager, we have selected J.P. Morgan Asset Management based on their broad-based local expertise.

OP-China

Online fees and charges

Subscription fee Annual management fee Redemption fee
0,75 % 2,50 % 0,75 %

Agreements under a systematic investment plan are not subject to subscription fees. Fund units generate OP bonuses.

The Western countries showing muted growth figures and the uncertainty caused by the debt crisis still troubling the market, Asia continues its steep rise. While China's importance to the world economy is a known fact, it is not widely grasped how much the Chinese domestic market has actually grown during the past decade – and still its major growth is only expected to occur later. The world's largest population base of over 1.3 billion people creates a solid ground for such forecasts. To understand the dimensions of the growth potential, we can look at the number of middle-class consumers. Around 70 million at the early 2000s, they now number more than half a billion and, in a couple of years' time, their number is estimated to nudge above 700 million, topping the figures of Europe and US together. China is also about to overtake the West when it comes to the number of cities with over 1 million people. From 58 in 2012, their number is forecasted to attain as high as 128 in 2025. Accelerating urbanisation naturally also requires sizeable investments in infrastructure.

Equity funds investing in fast-growing emerging markets serve the needs of investors seeking high returns. Operating on the stock markets of an emerging nation, the fund's value may fluctuate significantly depending on the market situation, and the risk level is as a rule higher than that of funds investing in advanced markets. The fund is also exposed to a notable currency risk since the fund's investments in China are made in yuans and those in Hong Kong and Taiwan are made in US dollars. OP-China is, therefore, a prime choice for a return-oriented investor believing in China's growth. This fund is mainly recommended to an investor who intends to redeem his/her units after nine years at the earliest.

China equities declined, following weak overseas markets amid rising U.S. rates and inflation expectations. The official PMI came in
softer than expected. However, overall consumption related indicators during the Chinese New Year holidays suggest continued solid
growth. Technology outperformed with lowered expectation and gradual improvement in outlook, along with sector rotations from
cyclicals to growth names. There is increasing focus on the upcoming third plenum of the 19th Party Congress, with rising expectations
of more policy announcements to address de-leveraging and various reforms. Offshore China equities lagged onshore with Southbound
Connect, a key source of liquidity in the past two years, turning a net seller post the Chinese New Year holidays.

The portfolio outperformed the benchmark. Positive stock selection contributed to returns, while sector allocation had little impact overall.
Key holdings in the Apple supply chain recovered this month to contribute to performance. The overweights in AAC Technologies, Han’s
Laser and Luxshare Precision added value. AAC Technologies should remain well positioned to derive earnings from its acoustics and
haptics core businesses, with RF mechanical and optical lens businesses to boost earnings further. Han’s Laser is a beneficiary of
import substitution as well as growing underlying demand, driven by penetration and new applications, of laser equipment. 

We have become incrementally more positive on Luxshare Precision given its expanding product portfolios in smartphone components and
accessories, the latest of which includes entry into the camera module space. Our structural growth holdings elsewhere also added
value. Focus Media rebounded on continued strength in advertising. Hangzhou Hikvision reported 25-30% top- and bottom- line growth.
Nexteer Automotive benefitted from a rebound in auto sales.

OP-China invests its assets in the stocks of companies operating in the People’s Republic of China, Hong Kong and Taiwan. The fund typically diversifies its assets in stocks of around 40–60 companies but this number may vary depending on the portfolio manager’s view. A minimum of 75% and a maximum of 100% of the fund’s value is invested in equity markets. The equity weighting typically varies between 90 and 100%. In addition to direct equity investments, the fund may also use derivative instruments to hedge against market changes, to replace direct investments and to otherwise promote efficient portfolio management.

By pursuing a moderate active risk policy, the fund seeks to achieve better long-term returns than its benchmark index, MSCI China 10/40 TR. The portfolio manager may thus depart from the composition and risk level of the benchmark index. The portfolio manager is J.P. Morgan Asset Management that has access to extensive local resources in China.

Read more about fund’s responsibility on the fund’s Finnish pages.
More details Basic data, performance and fact figures

Basic data

Fund manager
JPMorgan Asset Management
Benchmark index
MSCI China 10/40
Start date
10.06.2002
ISIN
FI0008805965
fund serie
Accumulation unit
Fund size
216 Meur
Serie value (24.02.)
448,30 EUR
Monthly review
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Rules
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Brochure
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Accumulated profit (21.02)

1mth 3mth 6mth 1 y 3 y p.a. 5 y p.a.
OP-China A +3,21 % +13,48 % +22,68 % +33,37 % +15,28 % +7,35 %
Benchmark +0,91 % +11,00 % +16,14 % +12,73 % +9,07 % +6,67 %

Yearly performance

2015 2016 2017 2018 2019 YTD
OP-China A +1,67 % -8,71 % +37,05 % -22,69 % +43,61 % +7,60 %
Benchmark +4,93 % +3,43 % +31,17 % -14,13 % +24,43 % +1,28 %

Key figures

Volatility 12 m vola 12m Sharpe 12 m
OP-China A 19,37 % 1,74
Benchmark index - -

Owner-customer benefits

  • As an owner-customer you can sell, buy and trade nearly all our mutual funds (savers’ funds, socially responsible funds, and equity and bond funds) without fees.
  • As an owner-customer, you can also invest in funds by saving through insurance. OP Unit-linked Insurance and OP Savings Agreement are insurance savings products intended for owner-customers that offer an effortless and flexible means for long-term saving. Switching between investment instruments and transferring funds to insurance savings is free of charge.
  • Owner-customers have automatic access to the second fee level on the stock brokerage fee list, in which the brokerage fee is 0.17% (min. 7 euros), while the fee at the first fee level is 0.2% (min. 9 euros).

OP bonuses

In addition to OP bonuses earned through saving and investment, owner-customer earn bonuses from

  • loans
  • funds in accounts
  • purchases you have paid with the OP-Visa credit
  • insurance premiums for home, family and motor vehicle policies.

OP bonuses are used for the bank’s service charges and insurance premiums.

 

OP Fund Management Company Ltd manages OP mutual funds.