Senate 2010: China bears hallmarks of overextension

With many investors looking East to avoid the risks of Western markets, groups are rolling out a raft of new China-focused funds.

Martin Currie recently launched a UK-domiciled China product and Anthony Bolton’s long-awaited China Special Situations trust started trading last month. There has even been discussion of a new IMA China sector as a result of the growth in open-ended funds. However, Old Mutual’s Stewart Cowley is concerned by what he sees as an over-reliance on China as the only growth option. With China announcing a $7.24bn (£4.74bn) March trade deficit – its first monthly deficit for six years – and its stock market underperforming in recent months, some analysts are questioning the sustainability o...