Investing in China with Rufus Frazier of Variis Partners
Is China investable? If so, how do you go about it? What are the basic ground rules?
Recently, I spoke to an American fund manager living in the UK whose life has been intertwined with China since he was a young boy.
Rufus Frazier has a long career investing in emerging markets, and he believes China offers some of the best investment opportunities available anywhere in the world.
In a fascinating discussion, we cover the macro backdrop to China and the perceived risks, such as the Taiwan issue, property rights and the historically poor returns from Chinese equities over the last couple of decades, when its economic growth has been so strong. What are we missing about this disconnect, and why might this be changing?
Rufus explains why the scale and structure of China’s market makes stock picking essential, he talks about the things to look for as well as the sectors and stocks to avoid.
For example, China’s Uber, Didi, seems fine, but its huge battery manufacturer with a dominant global market position, CATL, is more problematic.
Finally, Rufus puts the opportunity for Chinese equities into its broader EM context. Where are the other “hot” emerging markets? In his view, mainly in Latin America and Southeast Asia.
Now comes the bit where I remind you that none of what you are about to hear is investment or any other kind of advice, but just for your information and hopefully enjoyment. Please take professional advice before investing a penny of your money into these crazy markets.
And with that, please enjoy my conversation with the maverick, Rufus Frazier.
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