Star Chinese fund manager bets on Alibaba, liquor stocks for shareholder returns

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Zhang Kun of E Fund Management sees high returns, dividends in technology and consumer stocks

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People visit the booth of Alibaba.com during the 136th China Import and Export Fair in Guangzhou, south China’s Guangdong Province, on October 15, 2024. Photo: Xinhua

Zhang Shidongin Shanghai

Published: 4:15pm, 25 Oct 2024

A star Chinese fund manager made new investments in Alibaba Group Holding in the third quarter, making the e-commerce giant the second-biggest holding in his US$8.5 billion portfolio, as leading technology and consumer stocks look attractive in terms of shareholder returns after years of underperformance.

Zhang Kun of Guangzhou-based E Fund Management – who manages the biggest pool of money in China’s mutual-fund industry – bought 40.4 million Hong Kong-listed shares of Alibaba through his E Fund Blue Chip Selected Mixed Fund, according to the fund’s quarterly report released on Friday.

The 4 billion yuan (US$561.4 million) investment as of the end of September represented 9.1 per cent of the fund’s assets, it said. Alibaba was not part of Zhang’s portfolio in June, the fund’s interim report showed.

“We’ve observed that the dividend yields of some leading consumer companies are ranked among the top across the market and even surpass those of the constituents on the dividend indexes,” Zhang said in the report. “Considering comprehensive shareholder returns, including buy-backs and dividend payouts, some leading technology and consumer stocks offer very high returns on either an absolute or a relative level.”

Zhang is known for his value-investing mentality and the size of the funds he manages. The US$6.2 billion Blue Chip fund is his flagship product.

That fund delivered a 15.1 per cent return last quarter under the strategy of buying Alibaba and other large-capitalisation stocks like Chinese liquor producer Shanxi Xinghuacun Fen Wine Factory. That beat the 12 per cent gain in a customised benchmark designed to gauge the fund’s performance, which includes onshore stocks, Hong Kong-listed shares and bonds, according to the quarterly report.