Tencent, Kweichow Moutai among top China fund manager’s stock picks after reopening and market rout
- The US$8.3 billion E Fund Blue Chip Selected Mixed Fund had Tencent, Kweichow Moutai and Yili among its top 10 holdings as 2022 ended
- China Merchants Bank expects annual retail sales to increase by 9 per cent, up from a 3.5 per cent increase in the January-February period
China’s biggest fund manager latched onto consumer stocks as the end of Covid-19 restrictions promised to revitalise household consumption and sell-offs last year made equities more appealing.
Zhang oversees four funds with a combined US$13.1 billion in assets for Guangzhou-based E Fund Management, making him the biggest asset manager in China’s 27 trillion yuan (US$3.9 trillion) mutual-fund industry.
His preference for consumer bets aligns with the government’s prioritisation of household consumption this year, which has seen local authorities in Beijing and Shanghai unveil packages this month to spur consumption, including subsidies for purchases of electric vehicles and green appliances.
A sub-gauge of consumer-staple stocks, including Kweichow Moutai and Yili, has risen almost 30 per cent since an October low, making it the second-strongest industry group on the CSI 300 Index.
“Consumption is expected to recover to the pre-pandemic level as we have seen a mild recovery in household incomes, an improvement in the job market, reopening and all the consumption-boosting measures,” said Tan Zhuo, an analyst at China Merchants Bank in Shenzhen.
