Thematic overlay and macro insights are crucial in China’s unique stock markets
Local research presence in Shanghai and Hong Kong supplemented with tailored quant screens
Concentrated high active share portfolios
Robeco has considerable experience investing in China. Our Global Equity portfolio managers have been investing in Hong Kong since 1968 and we have had a dedicated Chinese Equities strategy since 1997. We were also among the first foreign managers to benefit from the opening of mainland Chinese equity markets.
Chinese markets are in a constant state of flux, reflecting buying and selling from investors with widely differing investment goals and risk appetites. This frequently produces anomalies and inefficiencies in the evaluation of risk and reward, offering the opportunity for alpha generation.
Robeco's Chinese Equity strategy seeks to identify and potentially exploit these inefficiencies by developing different investment strategies that use qualitative and quantitative research techniques. One of these inefficiencies is the deviation from fundamentals. Sectors and companies can all fall in and out of favor, depending on anything from economic trends to investors' risk appetites. By using fundamental analysis with a longer-term investment view, we aim to avoid the noise, looking beyond short-term volatility to uncover structural drivers. These include financially material ESG factors.
The strategy brings into play two main performance drivers that we use in our efforts to capture opportunities in Chinese equity markets:
Top-down thematic overlay to identify long-term structural growth and reform themes
Bottom-up stock selection based on in-depth fundamental, quantitative and sustainability analyses
The investment team is located in both Hong Kong and Shanghai. Our Chinese expertise is embedded in the broader Hong Kong-based Asia-Pacific team and Global Fundamental Equities group of more than 60 investment professionals.
The ‘mainstream’ Chinese Equity portfolio is invested in offshore Chinese stocks listed in HK and the US and local Chinese A-shares. In addition, Robeco offers a dedicated substrategy investing in A-shares only.
Our Chinese Equity strategy is fundamentally managed while our Chinese A-share Active Equities and Chinese A-share Conservative Equities portfolios are both quantitatively managed.
This strategy promotes, among other characteristics, environmental and/or social characteristics, which can include exclusionary screening, ESG integration, ESG risk monitoring and active ownership. It is classified as Article 8 under the EU Sustainable Finance Disclosure Regulation.
Robeco Chinese Equity integrates ESG factors into its investment process by analyzing the impact of the financially material ones on a company’s competitive position and value drivers. We believe this enhances our ability to understand long-term risks and opportunities of a company. If ESG risks and opportunities are significant, the analysis could impact a stock’s fair value and the portfolio allocation decision. In addition to ESG integration, the strategy applies an exclusion policy and benefits from voting and engagement activities focused on specific themes such as climate change, aiming to improve a company’s sustainability profile.
Flexible and opportunity-driven instead of bound to a benchmark
Unmoved by market sentiment and herd behavior; instead making decisions based on research, conviction and long-term focus
Concentrated portfolio to reflect our highest conviction stocks
A true understanding of the topic has been in our DNA since the start
