When it comes to Chinese equities, most overseas investors are investing in the same cohort of large companies. T. Rowe Price is able to delve deeper, according to Rob Secker
Changes in the economic landscape in China are creating great investment opportunities. But most overseas investors are only accessing the Chinese market through the same established mega caps.
According to Rob Secker, Portfolio Specialist at T. Rowe Price, the China Evolution Equity Strategy is allowing investors to delve deeper into Chinese markets and uncover hidden opportunities.
"Over 5,000 companies are listed in our universe," he says. "Yet the 100 largest companies - the mega caps, as we call them - absolutely dominate the Chinese indices and therefore dominate investors' portfolios.
"Our strategy deliberately excludes those mega caps to target a part of the market that we think is under-analysed and under-represented in investors' portfolios. We feel that makes the strategy unique, differentiated and complementary in nature."
Secker emphasises that the strategy is "bottom-up led" but adds that the firm is finding huge opportunities in the industrial sector. "It's very innovative and is driven by research and development.
"There are a lot of new business coming into that sector with new ideas, processes and approaches, which means it is constantly changing and we're constantly finding new ideas."
For more on China and the China Evolution Equity Strategy, take a look at our exclusive 3 Minutes With interview with Rob Secker