Fund Idea China’s Common Prosperity – What does that mean for | FSMOne SG - Research Highlights

Fund Idea

China’s Common Prosperity – What does that mean for investors?

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• Rather than anti-capitalism, China’s recent regulatory crackdown was due to its lack of progress in transitioning its economy into a consumption-driven one.

• Moving forward, we see sectors part of the country’s “Three Big Mountains” – education, healthcare, and housing – will continue to be at risk of further regulatory tightening, given their significance in influencing the cost of living.

• We believe that the domestic A-share market is better positioned for the Common Prosperity theme, particularly in the short term, and doesn’t lose out in terms of long-term prospects either.

•While we acknowledge that China equities may be volatile during this period given the fluidity of the Evergrande situation, we approach investing in China based on its massive long-term growth prospects.

• The profile of the A-share market, with its inefficiencies, advocate for an active approach, and we recommend the Allianz China A-shares Fund for value-seeking investors brave enough to take the plunge.

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: Allianz China A Shares AT ACC SGD