London-based Matrix Group, one of the UK’s leading financial services businesses with around USD5.9billion in AUM, confirmed this week that it had rotated its Matrix Asia UCITS Fund
London-based Matrix Group, one of the UK’s leading financial services businesses with around USD5.9billion in AUM, confirmed this week that it had rotated its Matrix Asia UCITS Fund to being “long” China and “short” Japan. The fund, managed by Rupert Foster, uses an equity l/s strategy to seek out returns and is one of only a select few UCITS to employ a Pan-Asia mandate. Foster believes the latest cyclical move in China is likely to last 12-18 months, with the “main Canary to be watched being inflation”, and has adjusted the portfolio accordingly. One key element highlighted by Foster was that despite fears of “over tightening” this year, micro data focused on low/mid end consumption (rather than luxury) in stores such as women’s shoe manufacturer, Belle, actually showed that sales had accelerated over the last few months.
Foster adds that such increased consumer spending illustrates that the 15-20 per cent wage hike is filtering into China’s economy as people have more disposable income to spend. “We have moved noticeably net long China since September and this will only increase in the next month or so,” Foster said in the firm’s official press release. Foster also anticipates that the Chinese government’s proposed USD30billion increase in social housing spending this year will directly benefit cement, steel and construction sectors. Foster goes on to say that as China’s workforce steadily moves away from factory overalls to downtown offices he favours “discretionary spend companies” as well as manufacturers and clothing retailers. Watch retailers and agricultural companies benefiting from inflation are also referred to. “I expect Asian markets to hit new highs in the next two to three years and then to surge further as ‘no growth’ Western consumption and demand disappoint expectations,” said Foster.
