Investment trust insider on China and Vietnam – James Carthew: taking China profits to plough into Vietnam
I was dealing on my portfolio again this week. I try not to turn it over too much but there were a couple of situations that I couldn’t ignore. First, I sold about half my position in JPMorgan China Growth and Income (JCGI). This has been hitting new all-time highs in recent days and it all looks a bit too good to be true.
Neighbouring Vietnam looks cheap, however, after foreign investors pulled a lot of money from the country in a knee-jerk flight to the perceived safety of the US, so I topped up my position in VinaCapital Vietnam Opportunity (VOF).
I wrote about JCGI last November and remarked on what had already been a great run of performance. Over the last six months, net asset value (NAV) has risen by a further 22.3% and the discount has narrowed considerably, resulting in a return to shareholders of more than 30%. In doing so, JCGI has extended its lead over Fidelity China Special Situations (FCSS): over this period its NAV and total shareholder returns were 11.1% and 10.3%.
I am still convinced there is room for another competitor in this field. In the ranks of the open-ended funds, Baillie Gifford’s Greater China fund ranks highly as does Matthews Asia, whose manager runs a chunk of Witan Pacific (WPC) and 8% of Witan (WTAN).
Invesco China Equity fund pops up on the radar too, so perhaps there is a chance for Invesco to re-expand its investment trust range after losing the Edinburgh (EDIN) and Perpetual Income & Growth (PLI) mandates?
An investment in JCGI would have beaten all of them over five years, however, making it another feather in the cap for the investment company structure versus open-ended funds.
So why did I sell? Well, to my mind it looks as though China is heading for a fall…. read more here