Add China in your portfolio: Invest in Mirae Asset China Advantage Fund

Is it a bad time to invest in Chinese market? Could be, looking at the poor Chinese data figures.

Will there ever be a good time? Possibly, and sadly, no.

Glance through the returns offered by Mirae Asset China Advantage Fund over the time frame of 1 year. Since the fund has only been launched on October, 2009, the 3 and 5 year returns were not available. Although the returns are not high as Mt Everest but still they are not as gloomy as one would have thought.

	Fund	Category
Year to Date	7.04	9.45
1-Month	4.22	5.44
3-Month	3.88	6.83
1-Year	8.44	16.85
3-Year	--	8.09
5-Year	--	4.62
Return Since Launch	1.75	--

 As on 24 Aug 2012

Source: Value Research

One must be wondering that being the power house of Asia why has China, failed to live up to investors expectations. Take a look at the recent issues that the Chinese economy has experienced.

The factory output measured by HSBC is at all time low of nine months, signalling the slowdown of the economy. The country’s export industry is all ravaged as the red dragon country faces a dip in its export number since many of its export partners are debt ridden European countries.

A report in Reuters states that that several projects amounting to trillions of Yuan has been stalled in China as they are mostly unfunded.

Do these news sound to you as the death knell of China? I bet it does.

However, things are not that bad altogether.

In a possible move to re instil the confidence back amongst the investors, Chinese Premier Wen Jiabao has called in for reforms that will help to stabilse the economy and revive the export industry Earlier, the Chinese Premier had promised of tax cuts and giving more loans to export oriented industries to avoid job loss and speeding up export industries.

Business Insider reported that, when Wen Jiabao was asked at an interview about the sulking export numbers, he said: “The third quarter of the year is a critical period for China to realize the year's export growth target and we should take targeted steps to stabilize growth,” according to Xinhua News Agency.

What makes China a good and safe bet? Like Wen Jiabao said, China should take a targeted step to stabilize growth. This line from the premier is a hint enough that the country is all set to boost up the reforms which will automatically lift up the sentiments of investors.

Moreover, situations are slightly improving in the Eurozone. The bond market in the region is showing signs of stability. The data from across the US is also quite encouraging except from the fact that a hurricane Issac is going to hit Florida, which may cause havoc.

Coming back to China, it is one of the most favourable opportunities for investors to enter into the Chinese market and exploit its advantages. China, being one of the powerhouses of Asia is bound to do well in days to come. Investors should have a long term investment horizon on the fund.

A fund that will enable you to participate in China and its growth story is Mirae Asset China Advantage Fund, a feeder fund whose underlying fund is Mirae Asset China Sector Leader Equity Funds. This fund invests in a wide range of sector - the entire banking and financial space, petro chemicals, energy and technology. This fund invests across a wide range of sectors offers a sound opportunity for Indians to invest across diversified companies of China, that have a paucity of investment opportunities in this country.

Having said that, China is experiencing a bad phase this year. Key concerns that are ruling the Chinese market and economy are growth concerns, slowdown of Chinese factory output, slippage of unofficial PMI numbers and etc. So don’t go overboard immediately. It is advisable to ensure that such a fund only makes up a small portion of your overall equity portfolio.