FSSA Greater China Growth

FSSA Greater China Growth is run by Martin Lau, a senior member of the famed FSSA Investment Managers team, and co-manager Helen Chen. Based in Hong Kong, the managers look for well-managed businesses with good corporate governance across Hong Kong, China and Taiwan. Martin has consistently delivered positive performance and demand for the fund was so fierce that it was closed to new investments for four years. It reopened to new investments in February 2016.

Previously First State Greater China Growth fund.

Our opinion

The FSSA Greater China Growth fund is an excellent portfolio in a very specialist area of Asian equities. It has been a firm favourite of ours for a number of years. Martin and the team have shown that they can consistently produce the goods in any type of market environment and it was great news when it reopened to new investors.

Fund manager

FSSA Investment Managers has a strong team-based process and its interests are firmly aligned with those of its investors. Martin Lau has been the lead manager on the FSSA Greater China Growth fund since its launch in 2003. He has more than two decades of experience running Asian and Chinese equity funds and holds a Bachelor of Arts degree from Cambridge University and a Masters degree in Engineering.

Helen Chen became co-manager in July 2019. She joined FSSA Investment Managers as a graduate in 2012 and is responsible for providing Greater China research, including China A-share, offshore Chinese, and Taiwanese companies. Helen holds a Bachelor of Economics in Finance from the Peking University in Beijing. She is also a CFA charterholder.

Even more so in today’s environment, where market volatility and uncertainty abound, the most important criterion for successful long-term investing is a focus on quality – quality of management, quality of franchise and quality of financials.

Martin LauFund manager

Investment process

The team has an absolute return mindset and invests in quality companies for the long term. It looks for sensible company management and businesses that have both sustainable and predictable growth. The team also has a strong valuation discipline and typically gets most of the fund’s outperformance in falling markets, although the fund can also perform well in rising markets.

ESG

ESG - Integrated  

FSSA takes a different approach to ESG. It believes that “sustainability is not just a label, but a set of values by which we operate”. Its approach places an emphasis on stewardship and the belief that quality managers and good governance should ensure that environmental and social concerns are rightfully addressed. To this end the company places a real emphasis on management engagement and, by asking in-depth questions, and taking a more holistic approach, fund managers build a thorough understanding of the company, its people and its culture. They conduct around 1,500 company meetings per year and also engage with NGOs and organisations such as the WWF. FSSA has an exclusion policy, preventing managers from investing in certain obvious red-flag companies, such as those involved in tobacco, defence and gambling. Other companies that fall outside the exclusion list, but which may still be involved in activities which may not be ESG-compliant, such as a fossil fuel company which is actively transitioning to renewable energy, are heavily debated and scrutinised by the team. Managers also look at third-party ESG ratings but only use them as one part of their research methodology, rather than as a deciding factor, given the nuances of investing in emerging markets.

Risk

This is a high-risk fund investing in a volatile region. It can invest a small amount in Chinese A-shares. It does, however, also have the flexibility to invest in 'Greater China', notably Taiwan, which is a more defensive market and an area that is used by the team when they are less positive on the shorter-term prospects for Chinese equities. This means the fund tends to be less volatile than most of its peers.

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