Speaking at in Sydney yesterday, AMP Capital head of portfolio management Debbie Alliston said the move was part of the AMP Capital Multi Asset fund's dynamic asset allocation process.
“We really like things to be cheap, and we really like to buy things nobody else likes. Chinese equities ticked both those boxes,” she said.
“We do it through futures. In our portfolios it’s the China 'A' shares or Hong Kong listed equities,” she said.
The Multi Asset fund tends to take all of its tilts through futures, said Ms Alliston, because it is "too expensive" to be invested in the underlying trusts.
AMP Capital chief executive Shane Oliver pointed out that the AMP was the first Australian institution to obtain a licence to invest directly in Chinese 'A' shares, with two exposures taken in 2005 and 2008. The AMP balanced fund recently took an exposure to China, he added.
"The reason I like Chinese shares is they are cheap. The [price to earnings ratio] of core [China] 'B' shares is eight or nine times, while the historic PE is 10-11 times," he said.
"They got back to expensive in 2009, and then there was a four-year bear market as investors were unnerved by the slowdown in Chinese growth. Now I think what's happening is that investors are starting to get comfort that the floor [for Chinese growth] is around seven to 7.5 per cent," said Mr Oliver.
"Besides Greece, China is one of the cheapest sharemarkets globally," he said.
