Key Facts:
- Fund Performance:
- The UOBAM Ping An ChiNext ETF had a negative performance for the fiscal year ending 30 June 2024. The fund’s NAV fell by 26.90% in SGD terms, compared to the benchmark ChiNext Index, which fell by 22.97%.
- Since its inception on 14 November 2022, the ETF has declined by 22.57%, while the benchmark index fell by 20.35%.
- Market Overview:
- China’s market faced challenges, with momentum slowing due to concerns over policy implementations, especially in the property sector.
- Economic indicators such as social financing, credit, PMI, and CPI remained weak, further adding to market pessimism.
- Outlook:
- The fund remains optimistic about opportunities in China’s A-share market, with structural opportunities in central state-owned enterprises, high dividend plays, and the AI supply chain.
- Risks include weaker-than-expected recovery in China’s macroeconomy, especially in the property sector, and potential geopolitical issues.
- Top Holdings (As of June 2024):
- The fund holds a single investment: Ping An ChiNext ETF, valued at SGD 1,727,561, representing 101.50% of NAV.
- Portfolio Adjustments:
- The ChiNext Index adjusted its stock composition in June and December 2023, adding companies primarily from the IT and healthcare sectors while removing those from industrials and consumer discretionary sectors.
Investor Actions:
For Investors Holding the Stock:
- Recommendation: Given the ETF’s significant decline, existing investors should evaluate the potential of a continued volatile performance. If optimistic about China’s long-term growth prospects, especially in sectors like AI and state-owned enterprises, holding the stock could be an option. However, careful monitoring of market conditions and policy outcomes is advised due to ongoing uncertainties in China’s macroeconomic outlook.
For Investors Not Holding the Stock:
- Recommendation: Investors without exposure to the ETF should consider entering cautiously. The current low valuations, driven by a significant market correction, could provide a good entry point for those with a long-term perspective and higher risk tolerance. However, it is crucial to be aware of the short-term risks tied to China’s economic and geopolitical uncertainties.
Dividends:
- Dividends: There is no mention of dividend payments in the report, and no distributions were made during the fiscal year.
Report Date and Financial Year:
- Report Date: 20 September 2024
- Financial Year Covered: 1 July 2023 – 30 June 2024
Special Actions to Improve Profitability:
- The fund has taken no direct action to improve profitability beyond strategic investments in the ChiNext Index, which itself has been adjusted with the inclusion and exclusion of specific stocks in the IT, healthcare, and industrial sectors.
Disclaimer:
This recommendation is based solely on the provided report and market performance during the fiscal year. It is important to note that past performance is not indicative of future results. Investors should conduct further research or consult with financial advisors before making any investment decisions.
