Lombard Odier Investment Managers launches China High Conviction Strategy

Lombard Odier Investment Managers (LOIM) has announced that it has expanded its global high conviction equity offering with the launch of a new China strategy, which aims to capitalise on the compelling opportunities emerging within the Chinese market.

China has experienced strong growth over the past two decades, mainly driven by globalisation. Yet today’s Chinese economy is rapidly diversifying into services, supported by a growing highly educated workforce. The economy is underpinned by excellent research and development facilities, with a notable shift towards the rapid adoption of efficient technology. These foundations, combined with a comprehensive societal shift motivated by millennials and their unique consumption patterns, create a highly desirable investment environment, reports LOIM in a press release.

LOIM’s China High Conviction strategy invests in high quality companies with sustainable business models that have the potential to deliver attractive economic returns over the long term. The strategy captures several investment themes across a diversified portfolio of 30 to 50 stocks, balanced across three buckets (quality value, high growth and corporate events) to navigate through different market cycles.

The strategy identifies companies based on a disciplined approach involving fundamental research and forward-looking analysis of business models and valuation. The resulting concentrated portfolio is strongly linked to the growing Chinese domestic demand where the future growth potential is.

The strategy is managed by LOIM’s Asia investment team – comprised of Portfolio Managers Zhikai Chen, Roxy Wong, Odile Lange-Broussy and Jinwen Ouyang. The team has a proven track record managing LOIM’s Asia High Conviction strategy, which has consistently outperformed its benchmark and peers.

Didier Rabattu, Head of Equities, Lombard Odier Investment Managers, said: “The opportunity in China is unparalleled in our view. Traditional equity indices have consistently under-represented Chinese companies and we believe it is still an untapped and high-potential market. China’s prolonged growth and extensive diversification into domestically-driven sectors will continue to transform the investment universe and this strategy is perfectly placed to capture these opportunities.”

Zhikai Chen, Portfolio Manager & Head of Asia Ex-Japan Equities, Lombard Odier Investment Managers, said: “The nature of economic growth in China is changing, which is creating compelling investment opportunities in the region. Millennials and the middle class are transforming China’s society and its consumption patterns. This, together with a move to transform China into higher value added industries with a focus on sustainability, continues to drive the substantial transformation of the Chinese economy over the past decade. As Chinese equity markets continue to perform, we believe this strategy is well positioned to help investors capture the associated benefits.”