Home / Money / Personal Finance /  Axis Mutual Fund looks east with Greater China Equity Fund of Fund

Axis Mutual Fund has launched a Greater China Equity Fund of Fund following strong returns delivered by Edelweiss Greater China Equity Offshore Fund, the only other Indian mutual fund focused on China.

The Edelweiss Fund, with a size of 762 crore, has delivered a return of 84% in rupee terms over the past year, vastly outstripping the 28% delivered by the S&P BSE 500 Total Returns Index (TRI). Its 10 year return stands at 16.73% CAGR, also higher than the 12% delivered by the S&P BSE 500 TRI. Axis Mutual Fund has a tie up with Schroders Asset Management, a global asset manager and the new fund will feed into Schroders International Selection Fund - Greater China.

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The underlying Schroders fund, domiciled in Luxembourg, was launched in 2002. It focuses on stock markets in mainland China, Hong Kong and Taiwan. It has delivered a CAGR of around 9.8% in US dollar terms over the past 10 years. In calendar year 2020, it is up 43% in dollar terms. Its top three holdings are Taiwan Semiconductor Manufacturing Company, Alibaba Ground Holding Ltd and Tencent Holdings Ltd.

"We believe international investing is an important part of an investor's portfolio, and emerging markets, particularly China, present an interesting investment opportunity. In the post COVID world, this is an economy rebounding quickly from crisis with opportunities in tech, financials and consumptions," said Radhika Gupta, CEO, Edelweiss Mutual Fund.

Some investment professionals, however, continue to favour US stocks for global diversification. "Investors can allocate 10-15% of their portfolio in international funds. However within this basket, I prefer the US market over China. The former has the world's most innovative companies and is much less correlated with India than China is," said Amol Joshi, founder, Plan Rupee Investment Services, a Mumbai based mutual fund distributor.

ABOUT THE AUTHOR

Neil Borate

Neil heads the personal finance team at Mint. A former colleague called them 'money nerds' and that's what they are. They cover topics like mutual funds, taxation and retirement, all to improve your chances of building wealth. Neil graduated with a degree in law and economics. He passed the CFA Level I exam and began his writing career at Value Research, a mutual fund research firm in 2016. He joined the personal finance team Mint in 2019. Everyday, the Mint Money Team tackles personal finance questions such as where to invest and where to borrow, through articles, charts and reader queries. They also have a daily podcast - 'Why Not Mint Money' and an annual ranking of mutual funds - the Mint 20.
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