Why Foreign Investors Perform Well In China

During his recent interview on The Acquirers Podcast with Tobias, Vivek Viswanathan, portfolio manager of the Rayliant Quantamental China Fund discussed Why Foreign Investors Perform Well In China. Here’s an excerpt from the interview:

Vivek: There’s also another beautiful aspect of China which is, they have reams of data. So, regulators require a lot of disclosures. They require the exchanges to seek out data on firms and understand more about their accounting, so on and so forth, and they will even create reports that can be publicly read about given firms. This coupled with the fact that there are so many retail investors who are not reading any of this data.

They’re not accessing any of this data. It makes it excellent for institutional investors. Indeed, we see that manifest, not just in mutual funds, but in foreign investors. Foreign investors in China A-shares tend to outperform. You might think, “Hey look, this is a market that is so unique and country specific that only the investors in the country really outperform.” But we actually don’t see that.

We see sophisticated investors globally coming in and earning alpha as well. All those things coupled together make it a really nice market to invest in when it comes from an alpha perspective.

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