Perseverance Asset Management, one of China’s largest hedge funds with over RMB100bn ($14bn) under management, has advised some clients to consider taking profits due to rising risks tied to the return of Donald Trump to the White House, according to a report by Bloomberg.
The reports cites a client note sent by the Shanghai-based fund and seen by Bloomberg as highlighting that increased volatility in China’s economy and markets could result from Trump’s stated policies.
Perseverance recommended that investors in certain funds managed by its star manager Deng Xiaofeng evaluate whether to redeem gains, citing strong performance so far this year and potential post-election risks. The firm highlighted concerns about mounting pressures on China’s exports and exchange-rate fluctuations, which could create a “complex environment” for investors. Clients have until 13 November to redeem.
Chinese equities had rebounded strongly since September following a series of government stimulus measures aimed at economic recovery. However, Trump’s election win raised concerns over a potential trade war revival, which could affect the economy and investor sentiment. Trump has previously proposed a 60% tariff on Chinese imports, a move that analysts say could further pressure China’s economic growth, which is already expected to struggle to meet a 5% target.
Perseverance’s notice emphasised that it was a routine update on redemption dates rather than a reactionary statement and the firm remains “optimistic” but cautious about market conditions. It clarified that the advice was specific to Deng’s funds and did not apply to other managers.
Deng’s Xiaofeng No2 fund has gained 32% this year, nearly doubling the performance of the CSI 300 Index. As of 30 June, Perseverance held significant positions in 35 Chinese companies, totaling RMB40.6bn, with Deng’s portfolio alone holding RMB19.4bn.
