OP Kiina

OP-China

Huge dimensions, huge potential
1

An effective way to invest in the world’s most quickly growing economic power

China’s economy has been growing strongly in the past few decades and the country has become the second largest economy in the world.

2

The increasingly wealthy middle class and a growing domestic market make China an attractive investment target

The focus in China’s economy is shifting from exports towards the domestic market. The world’s biggest population as well as the quickly increasing wealth and growing purchasing power of the population create a solid foundation for the growth of China’s domestic market.

3

Ageing of the population and their increase of wealth are megatrends also evident in China

For investors, megatrends offer numerous opportunities, as the consumer market and healthcare are constantly growing sectors in China. The fund emphasises these sectors in its portfolio management.

4

Take advantage of owner-customer benefits

As our owner-customer, you can buy, sell and switch OP-China fund units at no charge.

China – the world’s largest export economy and a growing domestic market

The markets in Mainland China offer investors the possibility to invest in high-quality companies operating in fields of structural growth, which have to do with consumers, the ageing population, and technological innovations. They open up opportunities for technology-driven fronts where China is the forerunner and is aspiring towards a leading position. Good examples of such fields are self-driving cars, artificial intelligence, e-commerce and mobile payment, for example. In addition, China’s recent efforts to open its financial market broader to overseas operators have made it easier for international investors to access the opportunities offered by the country.

China’s growing middle class both supports and demands an increasingly sophisticated range of consumer products, and this demand is more often addressed by Chinese companies. At the same time, Chinese companies are climbing on the technology curve, moving from low-margin commodities to production offering higher added value and creating new opportunities in the consumer durables markets, food and beverage industry, entertainment and tourism. The positive steps taken in technology and automation are particularly brisk in the fields of tablet components, software services and factory automation. We also see innovative services as well as pharmaceutical research and product development in health care, and traditional Chinese medicine also contributes to this development.

Possible threats stemming from the macro-economy include trade relations between the United States and China, economic downturn on the real property market in China and the high indebtedness of state-owned companies. These macro-economy concerns are currently under scrutiny. The Finnish Government’s long-term path towards the sustainable restoration of balance is nevertheless positive, as major success has already been achieved in it.

Why does it pay to invest in OP-China?

  • The fund is suitable for an investor who wants to benefit from China’s fast economic growth.
  • The growing, increasingly wealthy middle class generates strong growth potential on China’s domestic market that has the world’s largest population.
  • OP-China is an interesting option for investors seeking high returns from strongly growing emerging markets.

The fund’s performance may fluctuate significantly depending on the market, and, in principle, its risk level is higher than that of funds investing in developed 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, in turn, are made in US dollars. This fund is mainly recommended to investors who intend to redeem their units after nine years at the earliest.

As our owner-customer, you can buy, sell and switch OP-China fund units at no charge. Our selection of emerging market funds also includes six other funds. 

OP-China

Online fees and charges

Subscription fee Annual management fee Redemption fee
0,75 % 2,5 % 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.

The portfolio outperformed the benchmark during the month, with stock selection in consumer discretionary, as well as stock selection and asset allocation in healthcare (overweight) and financials (underweight) contributing. Offsetting this was stock selection and being underweight in materials. Several names in consumer discretionary contributed. JS Global, and China Yuhua, both rose on the back of solid results as in the case of the former it seems to be benefitting from a pick-up in demand for small domestic cooking appliances, as more people eat at home, while Yuhua should start to see a recovery in education demand. Pinduoduo also rose on its strategic partnership with consumer electronics retailer Gome, which will see the company’s product range supported by Pinduoduo.

Stock selection in healthcare helped performance as clinical research names (Hangzhou Tigermed/Wuxi Apptec) performed strongly on the back of solid results, and diagnostic equipment/service names (Autobio/Guangzhou Kingmed) were strong on the back of increased COVID-19 related diagnostic needs, increasingly outside of China. The underweight in financials; not owning China Construction Bank and ICBC, contributed this month, having previously detracted as market participants rotated from the seemingly safer names in the market and took on more risk. Conversely, the portfolio’s underweight to materials was the only sector to detract from performance for the month, driven by improving sentiment that economic activity would see a stronger pick-up.

OP-China (Fund) is an equity fund which mainly invests its assets in the Chinese, Hong Kong and Taiwanese equity markets. Its investments are mainly made in local currencies, which is why the Fund involves a major currency risk.

The Fund mainly invests directly in equities. In its investment operations, the Fund may use derivative instruments in order to hedge against the risk of adverse market and currency movements, to replace direct investments and to promote otherwise effective portfolio management.

The Fund’s equity market exposure may vary between 75% and 100% of the Fund’s value. The equity exposure typically varies between 90% and 100%.

The Fund invests broadly across various companies. The Fund typically invests in equities of about 40–60 companies but this number may vary depending on the investment manager’s view.

The Fund’s benchmark index is MSCI China 10/40 TR. With active investing, the Fund seeks to outperform its benchmark index in the long term. The Fund mainly takes high active risk and may differ very significantly from the composition, weights and risk level of the benchmark index.

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
195 Meur
Serie value (04.06.)
461,27 EUR
Monthly review
Download
Rules
Download
Brochure
Download

Accumulated profit (03.06)

1mth 3mth 6mth 1 y 3 y p.a. 5 y p.a.
OP-China A +4,44 % +6,83 % +17,43 % +38,87 % +14,63 % +4,31 %
Benchmark +1,92 % +0,34 % +5,30 % +14,27 % +6,52 % +2,20 %

Yearly performance

2015 2016 2017 2018 2019 YTD
OP-China A +1,67 % -8,71 % +37,05 % -22,69 % +43,61 % +10,71 %
Benchmark +4,93 % +3,43 % +31,17 % -14,13 % +24,43 % -2,49 %

Key figures

Volatility 12 m vola 12m Sharpe 12 m
OP-China A 22,25 % 1,76
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.