| Fund Company | CIBC Asset Management |
| Fund Type | Greater China Equity |
| Rating | C |
| Style | Large Cap Growth |
| Risk Level | Very High |
| Load Status | Optional |
| RRSP/RRIF Suitability | Poor |
| TFSA Suitability | Poor |
| Manager | Raymond Chan since May 2011 High Simon since May 2007 William Liu since February 2011 |
| MER | 3.27% |
| Code | ATL 1050 – Front End Units ATL 1051 – DSC Units |
| Minimum Investment | $500 |
Analysis: With signs coming out of China showing that the worst of the slowdown may be over and a recovery underway, some investors with higher risk appetites may be looking at adding some additional China exposure to their portfolios. One of the higher rated China funds in our universe is the Renaissance China Focus Fund, which is managed by Hamon Investment Group.
In managing the fund, the team uses a bottom up core approach where they seek out companies with accelerated earnings outlooks that are trading at a valuation level that is considered to be reasonable given the growth potential. Many factors are considered in their review including the economic and political trends in China, current financial market conditions, sector outlook, and the overall level of valuation in the markets. Ideally, they are looking to identify companies that are in the early stages of earnings acceleration.
The managers are not bound by any size restriction, which allows them considerable flexibility which they take advantage of. They are very active, with portfolio turnover averaging nearly 150% per year in the past five years.
This was the best performing China fund in 2012, gaining nearly 33%, leaving many of their competitors in the dust. Longer term numbers are also quite respectable with a ten year annualized return of 8.8%. A drawback is that it is very volatile. It is the most volatile fund in the category and is significantly more volatile than the index. As a result it is prone to periods of underperformance, for example, 2011 when it lost 38% while the index was down only 23%.
Another drawback to this fund is that it is quite expensive, with an MER of 3.27%
It is possible for most investors to get sufficient exposure to China through an emerging market fund. However, for those looking for more, this fund may be an option. That said, despite the strong performance since the new management team took over, Investors may want to look at a number of other, more reasonably priced options including Fidelity China, BMO Greater China or the low cost iShares China Index.