AsianInvestor recently conducted a project to identify the top 10 portfolio managers in China, those with star quality and a sprinkling of magic. You can find our rationale for this venture by clicking here.
We based our choices on a weighted set of criteria: long-term track record, market experience and applicability of strategy for a changing China. What unites them is an ability to find value, typically in sectors that will drive China’s future growth. These people have strong convictions and an ability to make good decisions.
Overall our list comprises three public mutual-fund managers and seven investors from the private markets side.
On public managers had to show a track record of at least five years to encompass both bull and bear cycles. All three on our list consistently ranked in the top 20% annualised over one, two, three and five years, including the recent market correction.
Here we profile the third and final public markets manager to make our list, Song Kun of E Fund Management.
Song Kun, fund manager, E Fund Management
Guangzhou-based E Fund broke a five-year record this April when its New Normal multi-asset fund raised Rmb15 billion ($2.35 billion) in a day on launch. Managed by Song Kun, its three-month performance to August 21 was -38% as it was hit by the correction, by Morningstar data.
But Song has that sprinkling of star quality. His Technology Information Fund, which uses multi strategies to get long-term return, ranked in the top 10 A-share products over five years to end-July with an annualised 20%. It returned 70.5% in the first seven months of 2015.
Song manages four funds with a combined Rmb33.6 billion as at end-June. More recent data was not available.
He has voiced confidence in China’s emerging industries over the long term, saying mobile and cloud technology will play a key role in the manufacturing sector. He also argues that this is a golden time for the development of healthcare and education in the country.
Song started as sector equity analyst with E Fund, before being promoted to manage money in 2010. He is media-shy and has rarely been interviewed, preferring to keep his thinking out of the limelight.
He sees investment as an imperfect art in which the market is in a constant state of evolution. Some opportunities are spotted, many aren’t. But he takes a sanguine view, seeing it as part of China’s transition – one which will continue to throw up opportunities.
He has said he expected the A-share market to correct in May owing to sky-high valuations. His flagship fund has returned 58% this year to August 21, ranking 16 among 689 peers. Importantly, his multi-asset allocation enabled him partially to protect returns.
Previously highlighted on the list of top 10 China stock pickers: