The manager’s philosophy is founded on the belief that the next evolution in China’s economy will be driven by Chinese consumers. As the state continues to strategically transform the economy to be more consumer-driven, ‘new economy’ sectors will develop and prosper while old, heavy industries will become less important growth drivers. The manager identifies themes related to China’s evolution towards a consumer- and innovation-driven economy and invests in companies positioned to benefit in the coming years. She believes local knowledge and insights can add significant value and generate consistent returns in all market conditions.
The process starts by identifying attractive sectors in the Chinese economy in which to invest. Subsequently, the manager conducts bottom up stock picking in these sectors through applying time-tested Western investment approaches to Chinese equities. In particular, the manager screens for companies that fit into the ‘winning stock patterns’ framework. Fundamental analysis, company visits and valuation modelling result in a list of stocks which the manager believes offer an upside potential >30% over 12-24 months. Stock weightings are based on conviction and risk considerations. If not enough attractively-valued stocks are found, low-beta stocks are added to mitigate downside risk. She monitors risk factors continuously and adjusts the portfolio when risk parameters exceed acceptable levels.
GAM China Evolution Equity is managed by Jian Shi Cortesi, a highly experienced manager with a strong understanding of the Chinese economy, companies, consumers and financial markets.
Jian has ultimate responsibility for investment decisions but leverages the expertise of GAM’s in-house sector specialists. Sector and theme specialists assists with providing information on industry and thematic trends, stock ideas and company analysis while GAM’s fixed income and currency team provides macroeconomic insights and inputs.
Jian is supported by GAM Investments’ risk team, which provides independent risk oversight, as well as investment administration and operations teams.
Our edge lies in our ability to combine deep China expertise with a Western-style stock-picking approach.Jian Shi Cortesi, Investment Director
The value of investments in assets that are denominated in currencies other than the base currency will be affected by changes in the relevant exchange rates which may cause a decline.
Some investments can be difficult to sell quickly which may affect the value of the Fund and, in extreme market conditions, its ability to meet redemption requests.
Non-base currency share classes may or may not be hedged to the base currency of the Fund. Changes in exchange rates will have an impact on the value of shares in the Fund which are not denominated in the base currency. Where hedging strategies are employed, they may not be fully effective.
Emerging markets will generally be subject to greater political, market, counterparty and operational risks.
Investment in companies of a single country may be subject to greater political, social, economic and tax risks and may be more volatile than investments in more broadly diversified funds. Local tax law may change retrospectively and without notice.
Changes in China’s political, social or economic policies may significantly affect the value of the Fund’s investments. China’s tax law is also applied under policies that may change without notice and with retrospective effect.
Investments in equities (directly or indirectly via derivatives) may be subject to significant fluctuations in value.
Currency control decisions made by the Chinese government could affect the value of the Fund’s investments and could cause the fund to defer or suspend redemptions of its shares.
The Fund may be investing in China A Shares via the Shanghai – Hong Kong Stock Connect / Shenzhen Connect which may entail additional clearing and settlement, regulatory, operational and counterparty risks.
All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.
Should the counterparty to a structured note default, the value of those structured notes may be nil.