Amid dizzying wrong-way bets and paltry gains for those with an eye on China and Asia more broadly, funds Sino Vision, Ubiquant, Toroa Management and Long Corridor Asset Management all saw gains exceeding 25% in 2023, according to a report by Bloomberg.
Their performances last year contrast starkly with a simultaneous 13% decline on the MSCI China Index of equities, as well as underscoring how some funds have delivered for investors despite increasing pressure facing once-dominant China-focused portfolios and Asia funds that capitalised on the world’s second-largest economy.
Sino Vision’s Greater China Market Neutral Fund put up 31.9%, propelled by AI-related bets in Taiwan, but has since lowered its gross exposure to China and Hong Kong since peaking in Q1 of 2022, according to a spokesperson cited in the report, due to fewer attractive opportunities.
Toroa Management’s Master Fund saw a 27.5% return, having relegated China to just one-sixth of its overall exposure as well as pivoting to industries such as advanced manufacturing, energy transition, electrification, automation and software primarily in South Korea and Japan — its biggest return drivers last year. When the $200m firm began trading in Q3 of 2021, its exposure to China was more than 50%. Toroa has also held short positions in suppliers of infant formula and liquor to China as well as real estate investment trusts in Japan.
Long Corridor Asset Management’s Alpha Opportunities Fund gained 26.7%, when about three quarters of its profit drew from trading in Greater China, which include the acquisition of Hong Kong-listed shares of PetroChina and Cnooc. In 2021, the latter was added to a sanction list by the Trump administration, causing international investors to dump their shares. Long Corridor subsequently began to buy Cnooc shares in 2022.
Their boons closely follow the shuttering of Chua Soon Hock’s Asia Genesis Macro Fund just last month, which saw a loss of nearly 19% due to a wrong-way bet that Japanese stocks would underperform Hong Kong and China peers in 2024.