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AMP Capital China Growth Fund

Giving your portfolio exposure to China’s growing economy is a great way to diversify and open up new growth opportunities. But for most SMSF investors, knowing what Chinese stocks to invest in can be difficult especially when they’re concentrating on local opportunities.

The China Growth Fund is an ASX listed investment company (LIC) that provides Australian investors with a unique opportunity to invest in the China A share market. The Fund has an experienced China based investment team that analyse over 500 China A shares and invest in a diversified mix of shares across major sectors. The Fund has a strong track record, returning on average 8.0% per annum since initial investment.
* Past performance is not a reliable indicator of future performance.

 


 

*Initial investment date: 10 January 2007. Performance as at 31 May 2016. Net performance is based on net asset value and is calculated after fees, expenses and taxes. These returns assume distributions are reinvested. Past performance is not a reliable indicator of future performance.

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Key stats

Performance is annualised for periods greater than 1 year.

Performance
8.0%

yearly average total return after fees since initial investment date*

Fees
No

establishment, contribution, withdrawal or termination fees

*Management and performance fees and expenses apply

Strategy
100

companies identified as having sustainable and normalised earnings growth while also representing good value.

Expertise
69

combined years of experience in the industry investment

The China Growth Fund has a strong track record, returning investors in the Fund an average of 8.0% per annum since initial investment.

For information on returns over other periods please see the Performance report.

Fund communicationAnnual report

Past performance is not a reliable indicator of future performance.

*Initial investment date: 10 January 2007. Performance as at 31 May 2016. Net performance is calculated after fees, expenses and taxes. These returns assume distributions are reinvested. Past performance is not a reliable indicator of future performance. Performance is annualised for periods greater than 1 year.

Performance as at 31 May 2016

3 Month 5.8%
6 Month -13.3%
1 Year -37.1%
3 Year 13.6%
5 Year 10.5%
Since initial investment* 8.0%
View performance report

When you invest in the China Growth Fund you have access to AMP Capital’s investment expertise at a competitive cost. There are no establishment, contribution, withdrawal or termination fees.

The following fees apply to the Fund – inclusive of GST, less any input tax credits:

 

Base fee and ongoing expenses

1.772% pa x Fund assets, made up of: 1.652%pa base fee and estimated ongoing Fund expenses of 0.12% pa

 

Performance Fees

20% of outperformance above the benchmark - S&P/CITIC 300 Total Return index (converted to AUD)

Further information about the Fund’s fees and expenses are outlined in the PDS.

Brokerage

You may need to pay brokerage to your broker when you buy and sell units.

The AMP Capital China Growth Fund aims to achieve long-term capital growth for investors by investing in China A shares, which are shares in companies listed on China’s Shanghai or Shenzhen stock exchanges; and outperform the S&P/CITIC 300 Total Return Index (expressed in Australian dollars).

The investment process is explained in the following illustration. The Fund invests in a diverse range of shares across all major sectors. Investment decisions are based on a company’s ability to provide sustainable, normalised earnings at a reasonable price. From the 500+ investable universe China A shares, the Fund focuses investments on a list of 100 stocks that have been analysed and meet this criteria.

AMP Capital is one of Australia’s leading investment houses with over A$150 billion in funds under management. Our Asian equities team has on average 15 years experience in the investment industry.

Asian equities team and experience

Name Title Qualifications Years of experience
in investment industry
Patrick Ho Head of Asian Equities BSc (Hons), MPhil, CFA 21
Eugene So Portfolio Manager/Analyst BBus, MSc, CFA 15
Sam Ho Portfolio Manager/Analyst BFin, CFA 15
Vincent Lui Portfolio Manager/Analyst BBA 10
Leanne L Portfolio Manager/Analyst BMgt, MBA 8

All information correct as at 29 February 2016

Frequently asked questions

What are China A shares?

China A shares are shares in Chinese companies listed on the Shanghai or Shenzhen stock exchanges. There are over 1,300 companies listed, diversified across a broad range of sectors. China A shares are denominated in renminbi (the official currency of China, of which the basic unit is the yuan) and can only be purchased by domestic Chinese investors, holders of a Qualified Foreign Institutional Investor (QFII) Licence, and foreign investors under the Strategic Investment Scheme.

What are the risks I should consider?

The risks specific to the Fund are:

  • Distribution risk
  • China risk
  • Tax risk
  • Currency risk
  • Service provider risk
  • Related party risk
  • InvestCo risk
  • Asset Allocation

All risks are explained in the product disclosure statement available on this website.

How do I invest in the fund?

The AMP Capital China Growth Fund is listed on the Australian Securities Exchange (ASX) so investments in the fund can only be made through a stockbroker.

Is there a distribution reinvestment plan?

Yes, the Fund has a distribution reinvestment plan (DRP). Under the DRP, 100% of your distributions will be reinvested in additional Units unless you elect to receive a partial cash distribution. However, even if you have elected to receive a partial cash distribution, we may determine that 100% of your distribution must be reinvested.

What fees can I expect?

Fees and costs that you may be required to pay in relation to your investment are set out in the PDS and include:

  • Base fee – 1.65%pa of the value of the Fund’s assets
  • Performance fee – 20% of outperformance above the S&P/CITIC 300

Total Return index (expressed in Australian dollars). We also recover ongoing expenses from the Fund. GST is payable on fees and costs. We will receive the base and performance fees in cash. However, we may elect, subject to the Corporations Act and ASX Listing Rules, to receive part or all of such fees as Units. We will make the election to receive cash or Units at the time these fees are payable.

What are the benefits of investing in the Fund?

Investment in the Fund provides you with:

  • exposure to the growing Chinese economy
  • the potential to diversify your investment risk, as the China A share market has not been correlated with major international share markets, including the Australian share market, over the last 10 years
  • access to China A shares, which are not readily available to Australian investors, and
  • access to the combined investment strength and expertise of AMP Capital’s investment team and global and regional specialists.
Are there any tax implications I should be aware of?

A general description of the taxation implications of the acquisition and ownership of Units for Australian residents is provided in Section 8 of the Product Disclosure Statement

How often will the Fund’s net asset value be reported to the ASX?

At least monthly.

How often are distributions paid?

Distributions are expected to be paid yearly, although you should be aware that there may be times when no distribution is payable on the scheduled distribution date.

The Chinese accounting period ends on 31 December and we have applied to the Australian Taxation Office for a substituted accounting period ending on the same date. If this application is successful, distributions will be scheduled for payment in April for periods ending 31 December. If it is unsuccessful, the Fund’s accounting period will continue to end on 30 June each year and distributions will be scheduled for payment in October for periods ending 30 June.

What is the performance of the fund?

The China Growth Fund has a strong track record, returning investors an average of 8.0% per annum since initial investment.

*Initial investment date: 10 January 2007. Performance as at 31 May 2016. Net performance is calculated after fees, expenses and taxes. These returns assume distributions are reinvested. Past performance is not a reliable indicator of future performance. Performance is annualised for periods greater than 1 year.

High quality diversified portfolio

Top 10 largest stock positions as at 31 May 2016:

4.87%
Ping An Insurance Group Co of China
4.25%
China Merchants Bank Co Ltd
3.35%
China Minsheng Banking Corp Ltd
3.06%
China Vanke Co Ltd
2.90%
Shanghai Pudong Development Bank Co
2.20%
Industrial Bank Co Ltd
2.03%
Jiangsu Hengrui Medicine Co Ltd
1.95%
Haitong Securities Co Ltd
1.78%
Ping An Bank Co Ltd
1.70%
Beijing Originwater Technology Co Ltd

The China Growth Fund seeks to primarily invest in companies with sustainable and normalised earnings growth that also represent good value.

Diversification across the China A share market is achieved mainly through investment in securities across a range of sectors such as, consumer staples and discretionary, health care, industrial, information technology, materials, energy, telecommunication and utilities.

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AMP's Australian operations are bound by the current Australian privacy legislation which outlines how organisations should manage and use personal information collected and held about their customers. AMP Privacy Policy
AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) (AMPCFM) is the responsible entity of the AMP Capital China Growth Fund and the issuer of the units in the Fund. To invest in the Fund, investors will need to obtain the current Product Disclosure Statement (PDS) from AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232 497) (AMP Capital). The PDS contains important information about investing in the Fund and it is important that investors read the PDS before making a decision about whether to acquire, or continue to hold or dispose of units in the Fund. Neither AMP Capital, AMPCFM nor any other company in the AMP Group guarantees the repayment of capital or the performance of any product or any particular rate of return referred to in this information. Past performance is not a reliable indicator of future performance. While every care has been taken in the preparation of this information, AMP Capital makes no representation or warranty as to the accuracy or completeness of any statement in it including without limitation, any forecasts. This content has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. Investors should, before making any investment decisions, consider the appropriateness of this information, and seek professional advice, having regard to their objectives, financial situation and needs.

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