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Christopher Wood christopher.wood@clsa.com +852 2600 8516<br />
Figure 23<br />
China real per capita disposable income growth<br />
14<br />
(%YoY) Urban Rural Nationwide<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
1997<br />
1998<br />
1999<br />
2000<br />
2001<br />
2002<br />
2003<br />
2004<br />
2005<br />
2006<br />
2007<br />
2008<br />
2009<br />
2010<br />
2011<br />
2012<br />
2013<br />
2014<br />
2015<br />
2016<br />
2017<br />
9M18<br />
Source: National Bureau of Statistics<br />
A few words are due on the performance of GREED & fear’s long-only portfolios in a year where it<br />
was better to be hedged! The Asia ex-Japan long-only portfolio outperformed last quarter, declining<br />
by 5% in US-dollar terms on a total-return basis, compared with an 8.6% decline in the regional<br />
benchmark. Still for 2018 as a whole, the portfolio underperformed, declining by 18.2% compared<br />
with a 14.1% decline in the regional benchmark. This reflected the negative impact from the sharp<br />
selloff in Indian financial stocks in 3Q18. Indian financial stocks still account for 28% of the portfolio.<br />
The portfolio remains 47% invested in India.<br />
The long-term performance of the Asia ex-Japan thematic portfolio remains, for now, satisfactory.<br />
Since its inception at the end of 3Q02, the portfolio has risen on a total-return basis by 1,585% in<br />
US-dollar terms compared with a 435% increase in the MSCI AC Asia ex-Japan and a 329% increase<br />
in the S&P500 (see Figure 24). This means the portfolio has risen by an annualised 19% since<br />
inception, compared with an annualised 10.9% increase in the MSCI AC Asia ex-Japan and an<br />
annualised 9.4% gain in the S&P500.<br />
Figure 24<br />
Asia ex-Japan long-only portfolio total return performance vs MSCI AC Asia ex-Japan (US$ terms)<br />
2,400<br />
2,100<br />
(30 Sep 02=100) Asia ex-Japan thematic portfolio total return<br />
MSCI AC Asia ex-Japan total return<br />
1,800<br />
1,500<br />
1,200<br />
900<br />
600<br />
300<br />
0<br />
Oct 02<br />
Apr 03<br />
Oct 03<br />
Apr 04<br />
Oct 04<br />
Apr 05<br />
Oct 05<br />
Apr 06<br />
Oct 06<br />
Apr 07<br />
Oct 07<br />
Apr 08<br />
Oct 08<br />
Apr 09<br />
Oct 09<br />
Apr 10<br />
Oct 10<br />
Apr 11<br />
Oct 11<br />
Apr 12<br />
Oct 12<br />
Apr 13<br />
Oct 13<br />
Apr 14<br />
Oct 14<br />
Apr 15<br />
Oct 15<br />
Apr 16<br />
Oct 16<br />
Apr 17<br />
Oct 17<br />
Apr 18<br />
Oct 18<br />
Note: Total return performance in US dollar terms. Data up to 31 December 2018. Source: CLSA, Datastream<br />
Thursday, 3 January 2019 Page 13
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