I am currently long the AMP China Capital China Growth Fund. The stated mandate of this fund is as follows –
To achieve long term capital growth, with a focus on investing in China A shares. To outperform the S&P/CITIC 300 Total Return index (expressed in Australian dollar).
The current chart looks like this.
Interestingly, the actual China A50 Index looks like this.
This raises the question as to why am i long a vehicle that exposes itself to China – in particular the A shares when the actual A shares index is such a dud. It is certainly not for the actual performance of the manager. The performance of this fund since 2007 has been very ordinary if we use share price as a proxy for returns. This raises two questions. Firstly, why the spike in AGF of late and secondly why am I long. The answer to these questions is quite simple. I have no idea why it has gone up (nor do I care) and I am long because the system told me to go long