Pengana reduces China exposure
The Pengana International Equities fund is taking steps to reduce its exposure to China as it is concerned about the country risk.
In a monthly update, the firm said the listed investment company now had a smaller proportion allocated to China.
China had seen problems in recent months including going back into COVID-19 lockdown which was affecting supply chains and a complicated relationship with Russia which was at war with Ukraine.
Managers Peter Baughan and Jingyi Li said: “We have taken steps over the course of the past quarter to reduce our exposure to China. We have grown concerned about the country risk associated with our Chinese shares, especially shares heavily owned by US investors.
“Our bottom-up fundamental research continues to identify many high-quality growth businesses in China that compare favourably with global peers but we have decided to trim our overweight as we reassess the implications of our holdings there for overall portfolio risk.”
The fund currently had 12.1% allocated to emerging markets and 2.1% to Asia Pacific ex Japan, there were no Chinese companies in its top 10 holdings.
The Shanghai Composite index was down 15.5% since the start of the year to 17 May versus losses of 6% by the ASX 200.
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Laura Dew
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