- Investors bought into China equity funds last month as country lessened lockdowns.
- Sentiment towards Asia Pacific region jumped 9 points.
- But market has subsequently slumped on news of fresh outbreaks.
- UK and Europe remain least popular investment geographies.
Investors Snap Up China Funds
“China’s zero COVID policy has resulted in the country pursuing regional lockdowns long after the West opened up. Last month, it seemed as if President Xi and his party would relax their stance, and market sentiment improved. HL investors snapped up China funds – with three country focused funds and an Asia fund featuring in the top 20 most bought for June. Chinese equity investment trusts were also among the most bought last month. But this optimism may prove to be short-lived as this week news that a new variant threatens new-found freedoms.
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China shares fell today as authorities announced testing for more than six million people in Guangzhou and Shanghai. Shanghai has only recently emerged from a two-month lockdown which impacted both the stock market and economic growth. Despite the uncertainty, Asia remains more in favour among UK investors than the domestic market, where political upheaval and raging inflation dominate sentiment.
The only region more unpopular with HL clients is Europe, where central bank policy has been slow to react to rising prices, leaving the European Central Bank with fewer levers to pull should the much-anticipated recession materialise next year.”
Investor Confidence Index
The investor confidence index is compiled by surveying HL clients on a monthly basis. Each month we send the investors’ confidence survey to 6,000 random clients and there is a representative split of our clients by age. On average around 10% of clients respond.
Data from HL’s platform:
Top Funds, June (net buy, alphabetical)
| Artemis Global Income |
| Baillie Gifford China |
| First Sentier Global Listed Infrastructure |
| FTF Franklin UK Equity Income |
| Jupiter Asian Income |
| Matthews China |
| Templeton China |
| Troy Trojan (Class X) |
| Troy Trojan Global Income |
| VT Argonaut Absolute Return |
Top Investment Trusts, June (net buy, alphabetical)
| BH Macro Ltd (GBP) Ord NPV |
| Caledonia Investments plc Ordinary 5p |
| Capital Gearing Trust plc Ordinary 25p Shares |
| City Of London Investment Trust Ordinary 25p Shares |
| Henderson Far East Income Ltd Ordinary NPV |
| HICL Infrastructure plc ORD GBP0.0001 |
| JPMorgan China Growth & Income Plc Ordinary 25p |
| Merchants Trust plc Ordinary 25p |
| Murray International Trust plc Ordinary 25p Shares |
| NextEnergy Solar Fund Ltd Ordinary NPV |
Top IA Sectors, June (net buy, alphabetical)
| China/ Greater China |
| Global Equity Income |
| Mixed Investment 40-85% Shares |
| Short Term Money Market |
| Unclassified |
Article by Emma Wall, Head of Investment Analysis & Research at Hargreaves Lansdown
About Hargreaves Lansdown
Over 1.7 million clients trust us with £132.3 billion (as at 30 April 2022), making us the UK’s number one platform for private investors. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.
