China’s biggest fund manager ramped up his buying of technology stocks from Meituan to Taiwan Semiconductor Manufacturing Corp (TSMC) in the first quarter, betting that the worst of a protracted regulatory crackdown on the sector is over and that an artificial intelligence (AI) boom will bolster demand for processing chips.
Zhang Kun, who oversees US$13 billion in assets for Guangzhou-based E Fund Management, bought 3 million shares in Meituan, China’s biggest on-demand delivery service provider, in his flagship Blue Chip Selected Mixed Fund, according to the first-quarter portfolio report released on Friday.
He also purchased 112,000 shares of TSMC, the world’s biggest contract chip maker, and increased his stakes in Alibaba Group and JD.com for the smaller Asian Elite Fund in the first three months, a separate report showed.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
The portfolio recalibration shows how China’s star money managers have positioned their funds in response to a slew of major news headlines from the reappearance of Alibaba founder Jack Ma Yun to the launch of AI-powered ChatGPT and its Chinese competitors.
The Hang Seng Tech Index and the Nasdaq Golden Dragon China Index have added almost US$40 billion in market capitalisation between them this year, recovering from a rout that erased at least US$1 trillion in value after Beijing tightened its scrutiny of the tech sector.
Zhang Kun, the star investor at E Fund Management, who manages the biggest amount of cash among all equity managers in mainland China. Photo: SCMP Handout alt=Zhang Kun, the star investor at E Fund Management, who manages the biggest amount of cash among all equity managers in mainland China. Photo: SCMP Handout>
The “unswerving” support for the private sector enshrined in the government work report this year “boosts confidence in the market and among entrepreneurs,” said Zhang in the quarterly report. “We continue to adhere to high-quality companies with decent business models, clear industry landscapes and strong competitiveness.”
After the purchase, his 56 billion yuan (US$8.13 billion) blue chip fund held 25 million shares in Meituan, its ninth biggest holding representing 5.6 per cent of its net asset value as of the end of March. Liquor giant Kweichow Moutai was still the fund’s biggest investment, accounting for almost 10 per cent of the allocation, after Zhang slightly increased its holding by buying 48,000 shares in the first three months.
Other top holdings of the fund include WeChat operator Tencent Holdings, Chinese baijiu distillers Luzhou Laojiao and Wuliangye Yibin, and oil producer CNOOC, the report showed.
The blue chip fund rose 1 per cent in value in the first quarter, lagging a 2.1 per cent return by its customised benchmark that comprises stocks and bonds.
Zhang’s most notable move last quarter was to raise the holding of TSMC by 26 per cent to 545,000 shares in his Asian Elite Fund that invests in overseas markets. The Taiwan-based chip maker, which has a 28 per cent weighting in the island’s Taiex index as the biggest constituent, made up 6.5 per cent of the fund’s value as its fourth-largest member, the quarterly report showed.
TSMC’s shares jumped 21 per cent in the first quarter on optimism that it will be a key beneficiary of an AI frenzy that will drive up demand for high-end computing chips and data centres used to train and host AI models. The company posted better-than expected first-quarter profit of NT$206.9 billion (US$6.8 billion) this week.
Tencent and Alibaba were the elite fund’s biggest holdings, representing 9.8 per cent and 8.5 per cent of its value, respectively, according to the quarterly report.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.
Source: https://finance.yahoo.com/news/chinas-biggest-fund-manager-increases-093000101.html