Funds focused on Chinese equities saw their weakest performance since the global financial crisis last year, after slowing growth and a slump in the technology sector pulled down mainland company listings, the Financial Times reports.
The MSCI China index fell 20.4% in 2018, the largest year-on-year drop since 2008. Roughly two-thirds of entries included in a ranking of more than 320 onshore Chinese funds compiled by data supplier Morningstar fell even further than the MSCI benchmark.
“The government not only continued its deleveraging policies and fiscal tightening, it also rolled out policies that disproportionately impacted internet, healthcare and education stocks,” said Howard Wang, head of greater China equites at JPMorgan’s asset management arm. JPMorgan’s $1.2 billion China A fund was down 17% by the end of November, according to the FT.
Tech stocks, which occupy a large slice of the MSCI China Index, were some of the slowest movers last year. Tencent, the largest stock, fell 22.7% last year following a government freeze on new game approvals amid child health concerns. Alibaba and Baidu also fell sharply.