Investing in China’s new economy

China’s new economy

Wealth is shifting to China’s new economy

The government is re-designing China’s economy. It is moving away from manufacturing towards a services-led growth model.

This change means that the new economy sectors like consumer, healthcare, education and IT are likely to grow faster that the rest of China.

China’s services sector still has ample room for growth. Services as a share of GDP (~52%) is still well below developed countries like the US (~87%).

Services sector in China is now a large part of the economy

Contribution to GDP

Source: FactSet, UBS Asset Management. Data as of Dec 2017

Look beyond GDP growth in China

Bin explains why it GDP growth does not matter as much as China transitions to a new economy

UBS China Fund

UBS (Lux) Equity Fund – China Opportunity
(UBS China Opportunity Fund)

The UBS China Opportunity Fund invests in new economy sectors and mainly in offshore listed stocks.

Why invest in the UBS China Opportunity Fund?

1. Strong outperformance over time

The UBS China Opportunity Fund returned 22.2%1 (annualised) over the last 3 years, outperforming the benchmark of 19.6%

It’s strong performance and robust investment process has earned the Fund various awards.

5 star Morningstar rating2

Fund awards3

2. Invests in future growth leaders

The Fund has a track record of investing in smaller companies that has since grown many folds. It currently has about 19% in mid- and small-cap companies

From small to large cap: TAL Education4

3. Invests in high conviction names only

The investment team only buys stocks that they believe have strong, long-term growth potential and is not influenced by benchmark weights. The Fund has about 40-70 stocks compared to about 150 in the benchmark. This gives the Fund a better chance to outperform the index.

TAL Education – a high conviction stock4

Fund holding vs benchmark

  • Education services benefit from rising incomes in China
  • TAL Education is a strong brand in the after-school tutoring market
  • It is innovative and uses artificial intelligence to improve teacher-student interaction

Why invest in China now

China equities are not expensive.  It is cheaper than Asia ex Japan equities and trading within its historical range.

Price to earnings of China equities vs region and historical range5


Learn more

How will China equities perform in the Year of the Pig?

Bin Shi, our Head of China equities, is scooping up opportunities in the Year of the Pig as the easing of trade wars improve sentiments.
 

How did China create the perfect chocolate bar?

The answer lies in the oodles of data that China produces. Data is the new fuel for China and gives new economy companies an edge in delivering innovative products and services.

UBS China Opportunity fund factsheet and prospectus

Get the latest fund performance, sector breakdown, top 10 holdings for the UBS China Opportunities fund.


 

Invest now

Speak to our distribution partners to learn more

  1. DBS Bank
  2. Maybank
  3. Citibank
  4. UOB Bank
  5. UBS Wealth Management

This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

UBS (Lux) Equity Fund (the "Fund") is a Luxembourg open-ended investment fund. UBS Fund Management (Luxembourg) S.A. is the responsible person for the Fund and the Fund's sub-fund, UBS (Lux) Equity Fund – China Opportunity (USD) (the "Sub-Fund") recognised under Section 287 of the Securities and Futures Act of Singapore. UBS Asset Management (Singapore) Ltd (Company Registration No.:199308367C) has been appointed as the Singapore representative ("UBS AM SG").

Investors should read the Singapore prospectus (“Prospectus”) for further details before deciding to subscribe for or purchase units in the Sub-Fund, a copy of which can be downloaded from our website. The Prospectus can also be obtained free of charge from UBS AM SG, or from any of our authorized distributors as listed in our website. The price of the units in the Sub-Fund and the income accruing to those units, if any, may fall as well as rise. The Sub-Fund may [use or] invest in financial derivative instruments* to the extent permitted under Luxembourg laws. Due to the investment policies [and/or portfolio management techniques] of the Sub-Fund, it may experience greater volatility in its net asset value*. Investments in the Sub-Fund are not deposits in, obligations of, or guaranteed or insured by UBS AM SG, UBS AG, UBS Asset Management or any of their subsidiaries, associates or affiliates or distributors of the Sub-Fund and are subject to investment risks, including the possible loss of the principal amount investment. Past performance of the Sub-Fund, the management company and the portfolio manager and any past performance, prediction, projection, forecasts or information on the economic trends or securities market are not necessarily indicative of the future or likely performance of the Sub-Fund or the management company or the portfolio manager or a guarantee of future trends. [Any extraordinary performance may be due to exceptional circumstances which may not be sustainable.] No responsibility can be accepted by the management company or the portfolio manager to anyone for any action taken on the basis of the analysis. No representation or promise as to the performance of the funds or the return on your investment is made. Units of the Sub-Fund are not available to U.S. persons.

The information about the Sub-Fund provided in this document does not constitute an offer or solicitation to deal in units of the Sub-Fund or investment advice or recommendation. It is for informational purposes only. This document was prepared without regard to the specific investment objective(s), financial situation or the particular needs of any person. It is based on certain assumptions, information and conditions available as at the relevant date(s) and may be subject to change at any time without notice. Nothing in this document should be construed as advice or a recommendation to buy or sell units in the Sub-Fund. Investors may wish to seek independent advice from a financial adviser before making a commitment to invest in the Sub-Fund). In the event an investor chooses not to seek advice from a financial adviser, the investor should consider whether the Sub-Fund is suitable for him.

© UBS 2019. The key symbol and UBS are among the registered and unregistered trademarks of UBS.
All rights reserved.

*Please refer to the Prospectus for more information on the risks associated with investments in financial derivative instruments and the Sub-Fund's volatility.

Meet Bin Shi

Bin Shi

Head of China Equities


Bin Shi is a member of the Global Emerging Market and Asia Pacific Equities team, located in Hong Kong. He is Country Analyst and Portfolio Manager for China with a focus on Chinese stocks listed on both the overseas and domestic Chinese stock exchanges.

Prior to joining UBS Asset Management, Bin spent three years as Head of Int’l Business, portfolio manager and analyst with Boshi Fund Management Co., one of the largest domestic mutual fund companies in China. Prior to that, he worked in the US for eight years as portfolio manager and analyst for several US mutual fund firms.

Bin joined UBS in January 2006.

Lessons from managing China equities

“Making mistakes is part of life, but making the same mistake twice cannot be forgiven”

How has Bin’s philosophy made him a better China equities manager?

Singapore Retail Investors

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