AIFMC Fund Market Review 20151116
Date:2015-11-16

AIFMC Fund Market Review 20151116.pdf

 AIFMC Weekly China Fund Market Review

Week of 2015.11.16

News Review

 

1.      Foreign funds to follow IMF lead with yuan bond holdings

Foreign asset managers are preparing to increase their exposure to yuan-denominated bonds, as the International Monetary Fund (IMF) looks likely this month to approve the inclusion of China's "redback" into its currency basket. Analysts forecast the IMF would give the yuan an initial weighting of around 14 percent in the basket, which goes by the official title Special Drawing Rights (SDR), bringing about $40 billion direct inflows in the next few years. But central bank holdings would be the tip of the iceberg. Together with other reserve managers and investors, a re-allocation annually of about 1 percent of global FX reserves outside of China to yuan assets is expected in the short term. AXA estimates total inflows to be around $600 billion over the next five years. 

 

Foreign participation in China's $7 trillion onshore bond market is a meagre 2 percent at present, and Beijing is keen to broaden the sources of funding as the economy slows. Bankers say that what the government has done to meet the technical criteria to get included in the SDR should in itself lead to an increase in foreign holdings of yuan assets. China has scrapped quota limits for foreign central banks and sovereign wealth funds to buy bonds in its interbank market and is planning to extend yuan trading hours to cover the European trading session to attract more investors beyond Asia.

 

2.      IMF's Lagarde supports proposal to include yuan in SDR

International Monetary Fund chief Christine Lagarde on Friday backed adding China's yuan to the global lender's benchmark currency basket after staff found it met the criteria for inclusion. The move lays the groundwork for the Fund's board, which will make the formal decision, to put the yuan on a par with the U.S. dollar, Japanese yen, British pound and euro. Beijing has been campaigning for its currency to join the SDR basket, which could increase demand for the yuan among reserve managers and mark a symbolic coming of age for China's economy. "I support the staff's findings," Lagarde said in a statement. The IMF's Executive Board would meet on Nov. 30 to consider the proposal, she said. Policymakers are seen as unlikely to go against a recommendation by IMF staff. Lagarde said staff had found the yuan, also known as the renminbi, met the criteria of being "freely usable", or widely used for international transactions and widely traded in major foreign exchange markets. Staff also gave the green light to Beijing's efforts to address operational issues identified in a report in July, she said.

 

3.      China capital flows turn positive on improved renminbi outlook

Capital flowed into China last month for the first time since unexpected currency devaluation in August shook investor confidence in the economy, easing fears over financial stability following an unprecedented bout of outflows. Capital has exited China at a record pace this year as an economic slowdown pushed Chinese gross domestic product growth to its slowest pace in six years. Outflows accelerated following the central bank’s unexpected move in August to let the renminbi weaken and the main stock index fell more than 40 per cent beginning in late June.

 

The outflow trend reversed in October as the central bank and other Chinese financial institutions bought a net Rmb12.9bn ($2bn) in foreign exchange, breaking a four-month streak of net sales, according to data from the central bank released on Saturday. Net forex purchases are considered a sign of capital inflow, while sales indicate outflows. October’s purchases followed record-high net sales of Rmb761bn in September. Separate data earlier this month showed that China’s official foreign exchange reserves — which only include holdings by the central bank — rose by $11.4bn in October, breaking a five straight months of decline. Total reserves stood at $3.53tn at the end of last month, down from a peak of $3.99tn in June 2014.

 

Market Fundamentals

 

Last week, Shanghai Stock Exchange and Shenzhen Stock Exchange had different performances. Shanghai Composite Index closed at 3580.84, down by 9.19, or 0.26%, while Shenzhen Component Index closed at 12402.04, up by 128.68, or 1.05%. CSI 300 Index closed at 3746.24, down by 47.13, or 1.24%. ChiNext closed at 2710.16, up by 48.75 or 1.83%.

Small-cap stocks outperformed its large-cap equivalents, as CSI 100 slipped by 1.81% and CSI 500 rose by 1.61%. According to CITIC Securities last week, 19 of 29 industries were closed in positive, of which composite, electric equipment and basic chemistry had the best performances of 6.53%, 5.88% and 3.81%, respectively; construction, commerce & retail and national defense had the largest drops of -2.59%, -2.18% and -1.63%, respectively.

Last week, S&P/CITIC Composite Bond Index closed at 1555.49, down by 0.09%.

Last week, Dow Jones fell by 3.71%, and S&P 500 fell by 3.63%. Meanwhile, Dow Jones Euro 50 dropped by 2.67%. Major Asia markets ended differently last week, with NIKKEI 225 up by1.72% and Hang Seng down by 2.06%.

 

Last Week’s Index performance (Week Ending 2015.11.13)

Name of Index

Index

Change (%)

Shanghai Composite Index

3580.84

-0.26

CSI 300 Index

3746.24

-1.24

Shenzhen Composite index

12402.04

1.05

SSE Fund Index

5905.32

-0.31

SZSE Fund Index

7776.40

1.59

CSI 100

3380.97

-1.81

CSI 500

7567.11

1.61

DJIA Index

17245.24

-3.71

S&P 500 Index

2023.04

-3.63

Dow Jones European 50 Index

3167.25

-2.67

DAX Index

10708.40

-2.54

CAC40 Index

4807.95

-3.54

FTSE 100 Index

6118.28

-3.71

RTS Index

814.93

-4.61

Nikkei 225 Index

19596.91

1.72

Hang Seng Index

22396.14

-2.06

Korea Composite Index

1973.29

-3.32

Sensex 30 Index

25610.53

-2.49

S&P/CITIC Composite Bond Index

1555.49

-0.09

Treasury Bond Full Price Index

120.68

-0.15

Corporate Bond Full Price Index

102.62

-0.60

Source: Wind, Howbuy Fund Research Center

 

Last Week’s Mutual Fund Performance (Week Ending 2015.11.13)

Fund Type

Change (%)

Equity Funds

1.50

Mixed Funds

1.01

Open-end Index Funds 

-0.31

Close-end Funds

0.17

Capital Guaranteed Funds

0.04

Bond Funds

-0.27

Money Market Funds

0.04

QDII Funds

-1.59

Source: Wind, Howbuy Fund Research Center. Note: QDII Funds as of November 12th, 2015 

 

Last Week’s Industry Performance (Week Ending 2015.11.13)

20151116.png

Source: Wind, Howbuy Fund Research Center.

 

AIFMC Fund Performance (Week Ending 2015.11.13)

Symbol

English Name

YTD

Recent 1Y

Recent 2Y

Recent 3Y

Since Inception

Return (%)

Ranking

Return (%)

Ranking

Return (%)

Ranking

Return (%)

Ranking

Return (%)

Ranking

163412

Asset-Light

91.97%

7/446

92.87%

11/445

190.52%

2/423

301.48%

4/392

268.96%

3/367

163406

Herun

78.62%

18/446

106.05%

6/445

154.57%

8/423

262.62%

6/392

188.47%

2/269

340007

SRI

62.47%

65/446

64.19%

146/445

88.12%

151/423

140.76%

104/392

217.69%

1/182

163415

Business Model

50.79%

143/446

84.12%

35/445

133.96%

23/423

--

--

129.05%

132/398

340006

Global View

48.80%

17/55

69.49%

10/46

91.66%

4/19

132.08%

5/17

610.31%

1/2

340008

Organic Growth

48.60%

64/226

52.07%

87/204

113.53%

15/115

156.16%

10/82

157.80%

14/36

163402

Trend

40.80%

95/226

62.01%

54/204

100.84%

28/115

123.58%

32/82

1072.39%

1/9

163409

Green

18.21%

389/446

41.43%

336/445

80.40%

195/423

160.63%

64/392

123.88%

28/318

163411

Capital Guaranteed

15.91%

39/70

19.26%

43/66

31.24%

39/53

43.79%

17/29

43.41%

14/20

340009

Stable Bond Return

12.01%

22/164

20.58%

15/159

47.90%

4/131

50.51%

11/107

56.98%

19/59

163407

CSI 300 Enhanced

8.28%

24/38

47.61%

16/35

69.48%

13/34

83.58%

13/26

36.97%

4/15

340005

MMF

3.70%

65/396

4.35%

62/373

9.27%

83/224

13.39%

51/121

33.80%

28/36

000575

Value-added Treasure MMF

3.62%

86/396

4.26%

77/373

--

--

--

--

7.96%

51/261

340001

Convertible Bond

3.52%

68/70

28.78%

18/66

60.18%

7/53

83.53%

4/29

584.11%

2/9

001511

New Horizon

2.40%

--

--

--

--

--

--

--

2.40%

98/515

Source: Wind, China Galaxy Research