UBS (Lux) EF China Oppo(USD) Q USD acc |
![](/includes/images/41x41a144.jpg)
![](/includes/images/clear.gif)
![](/includes/images/clear.gif)
by Claire Liang
![](/includes/images/clear.gif)
UBS (Lux) Equity Fund China Opportunity remains one of our favorites within its Morningstar Category, thanks to its experienced and skilled lead manager and a time-tested investment approach. We maintain the strategy’s People and Process ratings at Above Average. The strategy has benefited from stable leadership. Lead manager Bin Shi has been at the helm since the strategy’s restructuring in July 2010 and boasts 30 years of investment experience. He is a savvy and patient China equity investor, having identified several winners early and holding on to them to benefit from these companies’ long-term growth. His stellar long-term records on most of his China equity strategies further attest to his investment ability. Shi gets direct support from eight dedicated China analysts, including the strategy’s backup manager Morris Wu. The team has gradually expanded over the years, but it has seen heightened personnel turnover since 2021. It lost another two analysts in April 2024; they had been with the team for less than three years and will be replaced. The team added an IT hardware analyst to supplement its resources. While we are concerned about the team’s relatively high turnover over the past few years, much of our conviction continues to lie in Shi. Shi focuses on identifying industry leaders with strong competitive advantages and proven business models that are profitable and can benefit from China’s long-term growth trends. The portfolio has been centered around consumption, internet, healthcare, and insurance names, which are the key themes that Shi believed would benefit from China’s transition from an investment-driven to services-led economy. He has been investing in select real estate companies since 2021, though, as he saw growth opportunities in well-funded, state-owned developers and well-managed private developers to take market shares from their bankrupted peers. Nonetheless, he stayed away from the energy and utilities sectors where he saw limited growth. Many of the portfolio holdings are established industry leaders, which Shi believed have the competitive advantages and financial strengths to pull through China’s challenging macro environment and to position for new growth opportunities. The approach has delivered stellar long-term results, although its benchmark-unconstrained and buy-and-hold nature can sometimes result in lumpy performance. The strategy’s medium-term results were middling, partly owing to the persistent stylistic headwinds since 2021. Nonetheless, the strategy rests on solid foundations, and we remain confident it can add value for investors over the long run. |
Morningstar Pillars | |
People | Above Average |
Parent | Average |
Process | Above Average |
![]() |
Morningstar reserve its rights to charge for access to these Ratings and/or Rating report. |
![]() |
Permissions/Reprints E-mail Morningstar |