the China investment opportunity

the China investment opportunity

China is catching up – creating potential opportunities for discerning investors.

China is the world’s second largest economy today on a purchasing power parity basis, and is projected to grow faster than developed markets over the next two decades.1 As China transforms into a service-oriented and technology-driven giant, it may provide an attractive landscape for investing. 

Lombard Odier Investment Managers takes a sustainability-integrated and rigorous selection approach focusing on the sectors and companies it expects to benefit most from China’s evolution.

 

sub-fund details:

LO Funds - China High Conviction

 

Rapid growth, profound change.

 

Growth-engine.jpg Transforming-economy.jpg
Growth engine
China contributes nearly a fifth of the world’s Gross Domestic Product (GDP) today and continues to grow rapidly.2
Transforming economy
China is diversifying into services, on the back of a growing educated workforce and research and development (R&D).
Changing-consumption.jpg Under-represented.jpg
Changing consumption
Chinese millennials and a rising middle class form one of the world’s most powerful consumer force.
Under-represented
China is under-represented in global equity indices, creating a potentially attractive landscape for active stock-picking.3

 

why invest?

LO Funds – China High Conviction seeks to capture the growing opportunities in China equities through an actively-managed high conviction portfolio1.

China’s economic miracle is perhaps the most well-known of our generation, but today, domestic consumption is the main driving force of growth.2

 

Fast growth, profound change

China is forecast to grow faster than the rest of the world, creating diverse opportunities for investors. However, the country remains under-represented in global equity indices.3 

China is changing. It is transforming into a services-driven economy, with domestic consumption a key driver of growth. Urbanisation, growing productivity and continuing investment in R&D are also adding to the emergence of China as a technology giant. 

We believe our disciplined high conviction approach is key to capturing China’s rising stars.

Selective and diverse 

We target attractively-priced companies, using disciplined analysis focused on financial track record and sustainable business practices

To navigate economic cycles, we diversify across three themes: 

Quality value: stable, profitable but undervalued businesses with dominant market positions 
High growth: businesses with potential for market share gains 
Events: candidates for turnaround or upgrades with some risk mitigation factors 

 

investment team.

LOcom_AuthorsAM-Chen.png Zhikai Chen
Portfolio Manager, 20 years of experience, Hong Kong
LOcom-AuthorsAM-Lange-Broussy.png

Odile Lange-Broussy
Portfolio Manager, 25 years of experience, Singapore

LOcom-AuthorsAM-Wong.png

Roxy Wong
Portfolio Manager, 23 years of experience, Hong Kong

LOcom-AuthorsAM-Ouyang.png

Jinwen Ouyang
Portfolio Manager, 13 years of experience, Hong Kong

Source: LOIM.

 

investment strategy and philosophy.

At Lombard Odier Investment Managers, we believe sustainability will drive future return potential1. Our conviction in Sustainability is integrated into our processes, driving everything we do.

Our approach to implementation is rigorous and disciplined thanks to a transversal platform across strategies. This ensures maximum efficiency.

Our fundamental research is highly-focused and benefits from sharing of best-practices and ideas.

Our disciplined approach facilitates strict risk management by ensuring transparency and accountability at every step of the process.
 

a well-defined investment process.

Firstly, we create an initial universe of companies which has activities linked to the trends.

Secondly, we reduce this universe into those with an appropriate financial track record with a strong preference for best in class sustainable business practices.

Next we perform in-depth fundamental and forward-looking analysis, applying our strict investment rules.

Finally the portfolio managers build the final portfolio with c.30-50 names that are diversified across: Quality Value, High Growth and Events.

 

Investement-process.jpg

 

sub-fund details:

LO Funds - China High Conviction

sources.

1 There can be no assurance that the Sub-Fund’s investment objective will be achieved or that there will be a return on capital or that a substantial loss will not be incurred. For more information on the LOIM ESG process please refer to this page.
2 Source: IMF, January 2020.
3 Source: Bloomberg, 30 June 2020. MSCI World Index market capitalisation in USD split by geographies.

important information

Lombard Odier Funds (hereinafter the “Fund”) is a Luxembourg investment company with variable capital (SICAV). The Fund is authorised and regulated by the Luxembourg Supervisory Authority of the Financial Sector (CSSF) as an Undertaking for Collective Investments in Transferable Securities UCITS under Part I of the Luxembourg law of the 17 December 2010 implementing the European directive 2009/65/EC, as amended (“UCITS Directive”). This marketing document relates to “China High Conviction,” a Sub-Fund of Lombard Odier Funds (hereinafter the “Sub-Fund”). 
The Management Company of the Fund is Lombard Odier Funds (Europe) S.A. (hereinafter the “Management Company”), a Luxembourg based public limited company (SA), having its registered office at 291, route d’Arlon, 1150 Luxembourg, Grand Duchy of Luxembourg, authorised and regulated by the CSSF as a Management Company within the meaning of EU Directive 2009/65/EC, as amended; and within the meaning of the EU Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD). The purpose of the Management Company is the creation, promotion, administration, management and the marketing of Luxembourg and foreign UCITS, alternative investment funds (“AIFs”) and other regulated funds, collective investment vehicles or other investment vehicles, as well as the offering of portfolio management and investment advisory services. 
This marketing communication was prepared by Lombard Odier Asset Management (Europe) Limited.
The prospectus, the articles of incorporation, the Key Investor Information Documents, the subscription form and the most recent annual and semi-annual reports are the only official offering documents of the Sub-Fund’s shares (the “Offering Documents”). The Offering Documents are available in English, French, German and Italian at www.loim.com and can be requested free of charge at the registered office of the Sub-Fund in Luxembourg: 291 route d’Arlon, 1150 Luxembourg, Grand Duchy of Luxembourg.
The information contained in this marketing communication does not take into account any individual’s specific circumstances, objectives or needs and does not constitute research or that any investment strategy is suitable or appropriate to individual circumstances or that any investment or strategy constitutes a personal investment advice to any investor. This marketing communication is not intended to substitute any professional advice on investment in financial products. Before making an investment in the Sub-Fund, an investor should read the entire Offering Documents, and in particular the risk factors pertaining to an investment in the Sub – Fund. We would like to draw the investor’s attention toward the long-term nature of delivering returns across the economic cycle and the use of financial derivative instruments as part of the investment strategy may result in a higher level of leverage and increase the overall risk exposure of the Sub-Fund and the volatility of its Net Asset Value. Investors should take care to assess the suitability of such investment to his/her particular risk profile and circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. There can be no assurance that the Sub-Fund’s investment objective will be achieved or that there will be a return on capital. Past performance is not a reliable indicator of future results. Where the Sub-Fund is denominated in a currency other than an investor’s base currency, changes in the rate of exchange may have an adverse effect on price and income. Please take note of the risk factors.
Any benchmarks/indices cited herein are provided for information purposes only. No benchmark/ index is directly comparable to the investment objectives, strategy or universe of a Sub-Fund. The performance of a benchmark shall not be indicative of past or future performance of any Sub-Fund. It should not be assumed that the relevant Sub-Fund will invest in any specific securities that comprise any index, nor should it be understood to mean that there is a correlation between such Sub-Fund’s returns and any index returns. Target performance/risk represents a portfolio construction goal. It does not represent past performance/risk and may not be representative of actual future performance/risk.
MSCI information may only be used for internal purposes, may not be reproduced or disseminated in any form whatsoever and may not be used as the basis or constituent element of any financial instruments, products or indices. MSCI information should not be construed as investment advice or recommendations to you to make (or refrain from making) any investment decision and cannot, as such, be considered reliable. Historical data and analyses should not be considered as any indication or guarantee in any analysis, forecast or prediction of future performance. MSCI information is provided “as is” and the user of this information assumes full responsibility for the use that is made of this information. MSCI, each of its affiliates and others involved in or concerned with the compilation, calculation or creation of MSCI information (collectively the “MSCI Parties”) expressly disclaim all warranties (including, without limitation, all warranties of originality, accuracy, completeness, timeliness, non-infringement, market value and fitness for a specific purpose) with respect to such information. Without limiting the foregoing, in no event shall the MSCI Parties be liable for any direct, indirect, specific, incidental, punitive, consequential (including, without limitation, lost profits) or other damages. (www.msci.com).
The information and analysis contained herein are based on sources considered to be reliable. Lombard Odier makes its best efforts to ensure the timeliness, accuracy, and completeness of the information contained in this marketing communication.
Nevertheless, all information and opinions as well as the prices, market valuations and calculations indicated herein may change without notice. Source of the figures: Unless otherwise stated, figures are prepared by Lombard Odier Asset Management (Europe) Limited. The tax treatment depends on the individual circumstances of each client and may be subject to change in the future. Lombard Odier does not provide tax advice and it is up to each investor to consult with its own tax advisors.
NOTICE TO RESIDENTS IN THE FOLLOWING COUNTRIES:
Austria – Paying agent: Erste Bank der österreichischen Sparkassen AG.
Belgium – Financial services provider: CACEIS Belgium S.A. The Sub-Fund is not appropriate for Belgian retail investors unless the investment subscription is more than EUR 250,000. Please contact your tax advisor to identify the impacts of the Belgian tax “TOB” (“Taxe sur les Operations Boursières”) on your transactions, as well as the impacts of the withholding tax (“Précomptes mobiliers”). Lombard Odier has an internal Complaints Management Service. You can lodge a claim via your Relationship Manager or directly to Lombard Odier (Europe) S.A. Luxembourg, Belgium Branch, Claim Management Service, Avenue Louise 81, Box 12, 1050 Brussels, Fax: (+32) 2 543 08. Alternatively you can address your complaint free of charge to the national complaint service in Belgium, OMBUDSMAN: North Gate II, Boulevard du Roi Albert II, n°8 Boîte 2 2, 1000 Brussels, Tel : (+32) 2 545 77 70, Fax : (+32) 2 545 77 79, Email: Ombudsman@Ombusfin.be.
France – Centralising agent: CACEIS Bank.
Germany – German Information and Paying agent: DekaBank Deutsche Girozentrale.
Italy – Paying agents: Société Générale Securities Services S.p.A., State Street Bank International GmbH – Succursale Italia, Banca Sella Holding S.p.A., Allfunds Bank S.A.U., Milan Branch, BNP Paribas Securities Services, CACEIS Bank, Italy Branch.
Liechtenstein – Paying agent: LGT Bank AG.
Luxembourg – Depositary, central administration agent, registrar, transfer Agent, paying agent and listing agent: CACEIS Bank, Luxembourg Branch.
Netherlands – Paying agent: Lombard Odier Asset Management (Europe) Ltd, Netherlands Branch.
Spain – Paying agent: Allfunds Bank S.A.U. – CNMV Number: 498.
Sweden – Paying agent: Skandinaviska Enskilda Banken AB (publ).
Switzerland – The Sub-Fund is registered with the Swiss Federal Financial Market Supervisory Authority (FINMA). The Offering Documents together with the other Shareholders’ information are available free of charge at the Swiss Representative: Lombard Odier Asset Management (Switzerland) S.A., 6, avenue des Morgines, 1213 Petit-Lancy, Switzerland. Swiss Paying Agent: Banque Lombard Odier & Co Ltd. 11, rue de la Corraterie 1204 Genève, Switzerland. Publications about the Sub-Fund: www.fundinfo.com. The issue and redemption prices and / or the net asset value (with the mention “excluding commissions”) of the Share classes distributed in Switzerland: www.swissfunddata.ch and www.fundinfo.com. Bank Lombard Odier & Co Ltd is a bank and securities dealer authorised and regulated by the Swiss Financial Market Supervisory Authority (FINMA).
United Kingdom – This document is a financial promotion and has been approved for the purposes of Section 21 of the Financial Services and Markets Act 2000, by Lombard Odier Asset Management (Europe) Limited. It is approved for distribution by Lombard Odier (Europe) S.A., London Branch for Retail Clients in the United Kingdom. The Sub-Fund is a Recognised scheme in the United Kingdom under the Financial Services and Markets Act 2000. UK regulation for the protection of retail clients in the UK and the compensation available under the UK Financial Services Compensation scheme does not apply in respect of any investment or services provided by an overseas person. UK facilities agent: Lombard Odier Asset Management (Europe) Limited. Lombard Odier (Europe) S.A. UK Branch is a credit institution regulated in the UK by the Prudential Regulation Authority (PRA) and subject to limited regulation by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). Details of the extent of our authorisation and regulation by the PRA and regulation by the FCA are available from us on request.
European Union Members: This marketing communication has been approved for issue by Lombard Odier (Europe) S.A. The entity is a credit institution authorised and regulated by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg. Lombard Odier (Europe) S.A. branches are operating in the following territories: Belgium: Supervisory Authority: Autorité des services et marches financiers (FSMA), Representative: CACEIS Belgium S.A.,Avenue du Port 86C, b320, 1000 Brussels; France: Lombard Odier (Europe). S.A. Succursale en France, a credit institution under limited supervision in France by the Autorité de contrôle prudentiel et de résolution (ACPR) and by the Autorité des marchés financiers(AMF) in respect of its investment services activities; Italy: Lombard Odier (Europe) S.A. Succursale in Italia, enrolled in the Milan Companies Register No. 09514880963, R.E.A. No. MI – 2095300 Regulated in Italy by the Commissione Nazionale per la Società e la Borsa (CONSOB) and la Banca d’Italia; Spain: Lombard Odier (Europe) S.A. Sucurscoal en España, Lombard Odier Gestión (España) S.G.I.I.C., S.A.U., credit institutions under limited supervision in Spain by the Banco de España and the Comisión Nacional del Mercado de Valores (CNMV).
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