Jupiter is delighted to announce the launch of its new China Fund on 20th October.

The Fund, which aims to achieve capital growth by investing in Chinese companies, will be managed by Philip Ehrmann. Philip has joined Jupiter from Gartmore, where he managed the Gartmore China Opportunities and Gartmore Asia Pacific funds. Philip has more than 16 years experience managing emerging market equities. 

Philip believes there are tremendous opportunities for investors in China, particularly as the economy broadens out from being reliant on exports to developing domestic demand. He said: "There have been some doubts that growth in China can continue at its current pace but while there will undoubtedly be some hiccups along the way, there can be little doubt that China will be one of the biggest economies in the world in 20-30 years."

Philip believes the key to achieving this will be the development of domestic demand. He says: "The initial stages of China's economic development have been based on exports. But we are now entering the second stage, where tremendous growth in the number of middle income families is resulting in the emergence of domestic demand.

"This is crucial as it reduces the country's reliance on global demand. The Chinese government clearly recognises this in its 11th five year plan, which focuses on developing the domestic economy, increasing investment in infrastructure projects, driving forward agricultural reforms, increasing healthcare and education spending and reducing pollution."

Ehrmann says the investment opportunities in the domestic economy can be broken down into one of three key themes:

• Economic momentum
• Financial reform
• Emerging companies

He explained: "China is forecast to sustain real economic growth of 8%-10% per annum for a number of years, but the balance of that growth should start to shift towards domestic consumption, both because of the emphasis placed on this by the government and as an increasingly urbanised workforce starts to acquire greater spending power.

"In order to support that process, the government has been active in pushing through financial reforms that have enabled greater access to capital and financial services by China's growing private sector. It has also dramatically cut the level of non-performing loans in the banking system. Further reform in China's capital markets will increase access for overseas institutions, which should, in turn, lead to the launch of new products and services.

"Some of China's emerging companies are already global giants in their sector, but in many areas, particularly service industries, levels of industry consolidation are low by Western standards. Further consolidation activity should create opportunities for investors, as will further privatisation of state-owned enterprises. Of particular interest though are new industries, such as travel, telecoms and environmental services, in which strong players are starting to emerge."

The Fund will initially focus on investing in stocks listed on exchanges such Hong Kong, Singapore and Nasdaq, rather than in companies listed on the domestic stock exchange known as 'A' shares. Ehrmann said: "The liquidity, levels of market expertise and corporate governance standards make markets such as Hong Kong and Singapore - where many China-focused companies are listed -particularly attractive. It is, however, possible that we may invest on the domestic exchange over time as this market develops."

-ENDS-