The Chinese government policy to stimulate domestic consumption has had a positive impact on consumer stocks. James Chong
Investment director
Martin Currie

A detailed breakdown for the fund shows 55% will be invested in companies with a sub $3bn market cap and 75% in sub $10bn.

It is questionable whether this is in fact a small and mid-cap bias, but Martin Currie's managing director, Andy Sowerby, says: "Definitions of mid and small cap vary wildly depending on who you talk to and what index you ascribe to. It is however fair to say that our portfolio is biased to mid and small-cap growth companies and our reserch-driven approach is focussed on finding the long-term beneficiaries of China's economic transformation."

Among othe things, Anthony Bolton's arrival in Hong Kong has focused the eyes of many investors on China funds and with the new fund launches, one thing they will look at in particular is each house's different approach.

The Martin Currie team boasts of 13 China equity specialists, all of whom are fluent in Mandarin, and a local research base in Shanghai from where they visit 1000 companies each year.

"This is very different offering to our peers," Sowerby argues,"and is why we already manage around $3bn in dedicated China strategies for a global institutional client base."

The top five active holdings at launch will be ZTE (a technology company), Ju Teng International (technology), China Longyuan Power (power), Gome Electrical Appliances (consumer) and China Yurun Food Group (consumer).

Sector allocation

Overall, the active positions will be 15.4% in information technology, 12.5% in consumer discretionary, 12.1% industrials, 10.6% consumer staples, 5.2% materials, 4.8% utilities, 3.9% healthcare and 0.3% energy.
    
The fund's manager, James Chong explains this allocation, saying: "The Chinese government policy to stimulate domestic consumption has had a positive impact on consumer stocks. We are at the beginning of the replacement cycle for home appliances, which has also been enhanced by the emergence of China’s middle class. The social benefit scheme and the policies attached to healthcare reform have also played a significant role in promoting domestic consumption.  

"I see this as a long-term theme that I am keen to exploit for investors."