Summary of Investment Objective
The China Fund seeks to maximise total return. The Fund invests at least 70% of its total assets in the equity securities of companies domiciled in, or exercising the predominant part of their economic activity in, the People's Republic of China.
Fund Manager's Report (as at Jul 31, 2010)
The Fund underperformed its benchmark over the month.
Technology stocks enjoyed a strong month and our underweight in Tencent Holdings was among the leading detractors from relative performance. This was mitigated somewhat through the fund's positions in more attractive technology companies, such as Shanda Games and ZTE.
The announcement of RMB 60bn for the construction of economic housing in China’s west provided relief to the property and materials sectors and our positions in China Vanke, Shenzhen Investment, Anhui Conch Cement, China Shanshui Cement Group and Baoshan Iron and Steel all added significant value.
Our holding in WuXi Pharmatech detracted as it became increasingly likely that the takeover would be cancelled. We have been taking advantage of the euphoria associated with the deal to trim the position over recent weeks, but retain the stock as a core position.
We did not significantly alter the fund’s positioning July. By not participating in the IPO of Agricultural Bank our banking overweight was reduced by default. While ABC’s exposure to rural areas is potentially interesting, the initial pricing was too steep and we will continue to monitor the company.
We initiated a position in telecom equipment vendor ZTE, which has significantly underperformed this year due partly to an adverse foreign exchange move. We expect that Chinese telecom capex will be stronger than expected in the short-term while cost advantages will help ZTE take market share from Western rivals over the longer term.
We remain overweight consumer discretionaries, primarily through holdings in the clothing and services sub-sectors. The structural potential of this trade is well covered globally and valuations remain steep. For this reason, most of our positions here are off-benchmark. We are also overweight materials, which should benefit if the pressure is taken off the property market in the second half of the year. Conversely, we are underweight consumer staples, which have done well in a market that rewarded defensive positions in the first half. Given the recent outperformance and our sanguine outlook for Chinese equity for the remainder of 2010, we are finding more exciting opportunities elsewhere.
Fund Fact (as at Jul 31, 2010 )
| Status | Sub-Fund of Luxembourg SICAV |
| Fund Manager | Jing Ning |
| Launch Date | Jun 24, 2008 |
| Base Currency | USD ($) |
| Additional Dealing Currencies | EUR (€), GBP (£), HKD ($), SGD ($) |
| Total Fund Size (m) | USD ($) 425.7 |
| EUSD Fund Attributes | |
| EUSD Fund Status | out of scope |
| Fees | % |
| Annual Management Fee (A shares) | 1.50 |
| Initial Charge (A shares) | 5 |
| Codes | |
| ISIN | LU0359201612 |
| Bloomberg Equity Ticker | BLKCHA2 LX |
| Reuters Page Id | LU0359201612.LUF |
| Swiss Valoren Number | 4234438 |
| CUSIP | L1049N719 |
| Fund Risk Statistics | |||
|---|---|---|---|
| Name | 3 Years | 5 Years | Since Launch |
| Beta | - | - | - |
| Volatility (Annualised Standard Deviation) | |||
| China Fund | - | - | - |
| MSCI China 10/40 (net) | - | - | - |
Risk Grading
Low
High
Non-distributing
Important Information
The information on this website is available to Qualified Investors and Professionals in some jurisdictions on a limited private placement basis subject to applicable laws and regulations in the country of distribution. The information is confidential and should not be reproduced or distributed to persons other than the recipient.
The investment objective stated above is a summary of the main objectives of the Fund. Please refer to the BGF prospectus for full details.
A limited range of BGF sub-funds have a distributor status A share class that seeks to comply with UK Distributor Status requirements. Please contact the Manager for more information.
The fund invests a large portion of assets which are denominated in other currencies; hence changes in the relevant exchange rate will affect the value of the investment. The fund invests in economies and markets which may be less developed. Compared to more established economies, the value of investments may be subject to greater volatility due to increased uncertainty as to how these markets operate. The fund typically invests in smaller company shares which can be more unpredictable and less liquid than those of larger company shares. Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed. .
BlackRock Global Funds (BGF) is an open-ended investment company established in Luxembourg which is available for sale in certain jurisdictions only. BGF is not available for sale in the U.S. or to U.S. persons. Product information concerning BGF should not be published in the U.S. It is recognised under Section 264 of the Financial Services and Markets Act 2000. BlackRock Investment Management (UK) Limited is the UK distributor of BGF. Most of the protections provided by the UK regulatory system, and the compensation under the Financial Services Compensation Scheme, will not be available. A limited range of BGF sub-funds have a distributor status A sterling share class that seeks to comply with UK Distributor Status requirements. Subscriptions in BGF are valid only if made on the basis of the current Prospectus, the most recent financial reports and the Simplified Prospectus which are available on our website. Prospectuses, Simplified Prospectuses and application forms may not be available to investors in certain jurisdictions where the Fund in question has not been authorised.
Sources: Fund – BlackRock Investment Management (UK) Limited (BIM(UK)L), Indices - Datastream, BIM(UK)L. Quartiles - Standard & Poor's. BIM(UK)L Risk Grading: High Risk (on a scale of Low, Medium, Medium/High and High). This grading applies to Funds with emerging market, small capitalisation, or narrowly focused/concentrated equity mandates, which may restrict liquidity and increase the volatility of returns. It should only be used for comparison with other BlackRock Global Funds (BGF) and, in particular, should not be used in comparison with Funds not provided by BIM(UK)L. The grading is indicative of the level of risk of a particular Fund and is not supposed to be a guarantee of likely returns. If you are in any doubt as to the level of risk that you should take, you should seek Independent Advice. BIM(UK)L Risk Grading: High Risk (on a scale of Low, Medium, Medium/High and High). This grading applies to Funds with emerging market, small capitalisation, or narrowly focused/concentrated equity mandates, which may restrict liquidity and increase the volatility of returns. It should only be used for comparison with other BlackRock Global Funds (BGF) and, in particular, should not be used in comparison with Funds not provided by BIM(UK)L. The grading is indicative of the level of risk of a particular Fund and is not supposed to be a guarantee of likely returns. If you are in any doubt as to the level of risk that you should take, you should seek Independent Advice.Performance is shown as at Jul 31, 2010 in USD on a NAV price basis with income reinvested. Fund performance figures are calculated net of fees.