| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | -1.4% | -1.4% |
The Guinness China A Share Fund declined 1.4% in Q1 2026, underperforming its benchmark by 1.2 percentage points. The managers believe current market conditions are creating attractive opportunities as valuations have become disconnected from improving fundamentals across key holdings. The fund is positioned with an 11% overweight to Industrials, where companies are benefiting from AI-related infrastructure build-out, improving pricing dynamics, and stabilising end-market demand, yet continue to trade at subdued valuations. The portfolio also maintains a 16% overweight to Consumer Discretionary stocks, where the managers see opportunities driven by low valuations as markets price cyclical weakness as permanent. Key contributors included solar encapsulation film manufacturer Hangzhou First Applied Material and battery materials company Shanghai Putailai New Energy. The managers initiated a position in Weichai Power to benefit from growing demand for power solutions linked to data centre expansion. They believe markets are underestimating the earnings recovery and AI-linked demand embedded in their Industrial holdings while underappreciating long-term cash flow potential in consumer-facing companies.
The fund invests in quality, profitable Chinese companies exposed to structural growth themes including AI-related infrastructure build-out, industrial upgrading, and energy transition, believing current valuations are disconnected from improving fundamentals and long-term cash flow potential.
The managers believe current market conditions are creating opportunities with valuations disconnected from improving fundamentals. They see the recent market pullback as an attractive entry point, with the portfolio trading at low valuations both in absolute terms and relative to the index. The market is pricing current cyclical weakness as permanent while underappreciating recovery potential in Industrials and structural earnings growth linked to China's industrial upgrading.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 28 2026 | 2026 Q1 | 000858.SZ, 002008.SZ, 600036.SS, 600563.SS, 600690.SS, 603659.SS, 688398.SS | AI, China, consumer discretionary, Energy Transition, industrials, Manufacturing, Valuations | - | Guinness China A Share Fund managers see attractive opportunities as valuations disconnect from improving fundamentals. The fund is overweight Industrials benefiting from AI infrastructure build-out and Consumer Discretionary stocks trading at low valuations. Despite Q1 underperformance, they believe markets are underestimating earnings recovery potential and structural growth themes in their portfolio companies. |
| Dec 31 2025 | 2025 Q4 | 000002.SZ, 000858.SZ, 300014.SZ, 300760.SZ, 600276.SS, 600519.SS, 600887.SS | A-shares, China, consumer, Industrial, Quality, Structural Growth, technology, value | - | Guinness China A Share Fund outperformed in November through stock selection in Consumer Discretionary. The fund focuses on high-quality companies with structural growth exposure rather than policy-dependent businesses. China's economy shows industrial strength but weak consumer demand, approaching a transition point where new industries should offset real estate drag by late next year. |
| Oct 30 2025 | 2025 Q3 | 000333.SZ, 0005.HK, 002714.SZ, 0700.HK, 0981.HK, 1024.HK, 2899.HK, 300274.SZ, 300750.SZ, 600519.SS, BABA, BIDU | AI, China, growth, semiconductors, technology, value | - | China A-shares fund returned 23.6% in Q3 but underperformed by avoiding overvalued AI stocks that drove market gains. Manager compares current AI valuations to China's COVID rally peak in 2021, staying disciplined on quality companies with structural growth exposure. Fund trades below historical averages while market trades above, creating attractive relative positioning for patient investors. |
| Jul 2 2025 | 2025 Q2 | BRK-B, JPM, MSFT, NVDA, PLTR | AI, Fed policy, growth, healthcare, Mega Cap, tariffs, technology | - | Oak Ridge's growth strategy focuses on AI transformation while managing concentration risk in mega-cap dominated markets. Healthcare holdings detracted in Q2 despite strong overall market performance. Technology stock selection in mid-caps drove alpha as the sector rebounded. Key catalysts include anticipated Fed rate cuts and continued earnings growth to support elevated 25X market valuations. |
| Apr 1 2025 | 2025 Q1 | BABA, BTI, CHTR, CRDA.L, DGE.L, FAST, HILS.L, MCO, MSFT, ORCL, PM, POOL, REL.L, SCHW, SGE.L, SPX.L, TMO, TXN, WSO | diversification, Funds, Long Term, NAV, Private Capital, Public Companies | - | Caledonia delivered 4.4% NAV return driven by strong Public Companies and Private Capital performance. Permanent capital structure enabled swift deployment during April volatility, adding Charles Schwab. Oracle's AI-driven gains provided profitable exit opportunity. Stonehage Fleming sale delivers 3.2x returns. Diversified three-pool approach continues outperforming inflation and markets over long term despite macroeconomic headwinds. |
| Jan 8 2025 | 2024 Q4 | - | - | - | |
| Oct 1 2024 | 2024 Q3 | - | - | - | |
| Jun 30 2024 | 2024 Q2 | - | - | - | |
| Apr 2 2024 | 2024 Q1 | - | - | - | |
| Jan 9 2024 | 2023 Q4 | ADS.DE, AMT, AMZN, AVGO, DEO, ES, GOOGL, MA, META, MSFT, NESN.SW, NKE, NVDA, ORCL, RKT.L, SAP, TSM, UMG.AS, UNH, YUM | AI, global, large cap, Quality, semiconductors, technology, Trade Policy | ADS.DE | Magellan Global Opportunities delivered solid Q3 returns despite lagging benchmark in risk-on environment. Portfolio benefited from Alphabet antitrust resolution and AI-related semiconductor demand but faced headwinds from telecom infrastructure concerns and AI disruption fears. Manager maintains cautious stance given record market levels and full valuations while seeing opportunities in high-quality individual names. |
| Sep 30 2023 | 2023 Q3 | ADS.DE, AMT, AMZN, ASML, AVGO, CMG, ES, GOOGL, INTC, MA, MELI, META, MSFT, NESN.SW, NVDA, NVO, ORCL, SAP, TSM, YUM | AI, consumer, global, Quality, semiconductors, Sportswear, technology | ADS.DE | The fund lagged during the September quarter as speculative AI-related companies outperformed in a risk-on environment. While positive on long-term GenAI potential, the manager views current AI enthusiasm as increasingly speculative and circular. Despite expecting reasonable US economic activity aided by rate cuts, the manager maintains caution given record equity valuations with insufficient risk discounting. |
| Jul 1 2023 | 2023 Q2 | - | Peer Group, Performance, tariffs, Trade Policy | - | RVK's Q2 2025 peer group analysis shows institutional portfolios posted positive returns despite initial tariff-driven market volatility. US trade policy dominated the quarter with sharp initial equity declines followed by recovery after a 90-day tariff pause and trade deal progress. Performance data spans multiple timeframes with percentile rankings for comparison. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIThe fund sees compelling opportunities in Industrials benefiting from AI-related infrastructure build-out, including power generation and grid investment. Several holdings benefit from power and infrastructure build-out for AI data centres, though they trade at materially lower valuations than direct AI beneficiaries like semiconductor stocks. |
Data Centers Infrastructure Power Equipment Semiconductors Industrials |
Energy TransitionThe portfolio includes exposure to solar encapsulation film manufacturing through Hangzhou First Applied Material, battery materials through Shanghai Putailai New Energy, and energy storage solutions. These companies are positioned to benefit from the ongoing transition to renewable energy sources. |
Solar Battery Supply Chain Energy Storage Renewable Components | |
Electric VehiclesHoldings include exposure to EV supply chain through companies like Xiamen Faratronic and Shanghai Putailai New Energy. While EV pricing dynamics remain a headwind with ongoing pricing pressure, management sees prices nearing floor levels and expects continued double-digit growth. |
EV Batteries Auto Parts Battery Supply Chain | |
Industrial PolicyThe government's policy focus on upgrading the manufacturing sector and moving up the value chain creates opportunities. The objective is to increase output per worker, enabling higher wages and stronger consumption over time, reinforcing preference for companies exposed to industrial upgrading and productivity gains. |
Industrial Machinery Automation Manufacturing | |
| 2025 Q4 |
ChinaChinese markets continued to lag after a strong Q3 run, with the MSCI China A Onshore Index falling 2.3% in November. The economy has lost momentum with industrial production at 4.8% while retail sales rose only 1.3%, reflecting government support favoring industrial upgrades over consumer demand. China is reaching a critical transition point where new pillar industries should offset real estate drag by late next year. |
A-shares Industrial Consumer Transition |
QualityThe fund focuses on high-quality, profitable companies with durable competitive advantages and long-term growth potential. These companies are not solely reliant on the macro environment to generate growth, offering exposure to structural growth themes rather than businesses dependent on short-term policy support. |
Profitable Competitive Structural Growth | |
Consumer DiscretionaryStock selection in Consumer Discretionary was a key contributor to relative performance, driven by holdings like Suofeiya Home Collection, Zhejiang Supor, China Tourism Group and Midea Group. The fund maintains exposure to consumer themes built upon changes in incomes, demographics, and technology application in consumer settings. |
Consumer Demographics Technology | |
| 2025 Q3 |
AIChina's onshore AI stocks have driven significant market gains but are viewed as significantly overvalued with 70-90% of valuations based on uncertain future cash flows. The manager avoids these names, comparing current valuations to the peak of China's COVID rally in early 2021. |
Artificial Intelligence Semiconductors Technology Valuation Growth |
ChinaThe fund focuses exclusively on China A-shares, with weak macroeconomic data contrasting with booming equity markets. The manager sees selective opportunities while avoiding overvalued AI names and maintaining exposure to structural growth themes. |
A-shares Onshore Structural Growth Demographics Technology | |
SemiconductorsSemiconductor and technology hardware companies feature prominently in both holdings and market performance drivers. The fund benefits from positions in companies like Shengyi Technology while avoiding expensive AI-related semiconductor names. |
Chips Hardware Manufacturing Supply Chain Electronics | |
| 2025 Q2 |
AITechnology has been at the forefront with great excitement over transformative effects of AI, evidenced by sold-out Nvidia Blackwell chips and strong Microsoft Azure results. AI will likely continue to create transformative new opportunities at an unprecedented pace. The market concentration in AI-dominant fields is notable with all but Berkshire and J.P. Morgan among the top 10 S&P 500 constituents being in AI-dominant fields. |
Nvidia Microsoft Azure Blackwell Technology |
GLP1Healthcare holdings included long-term positions in a leading pharmaceutical company that had soared due to their leading GLP-1 drug and robust pipeline. A health and wellness company spiked 67% on their involvement in adding GLP-1 drugs to their lineup. The drug company is believed to be poised for future upside revisions due to further advances in weight loss and new drugs for Alzheimer's and cancer. |
Pharmaceuticals Weight Loss Healthcare Biotech | |
Trade PolicyThe quarter began with panic selloff in reaction to triple-digit tariffs threatened on President Trump's Liberation Day. Fed concerns over tariff effects on inflation and interest rates initially caused market stress, though the market began to view any inflationary impact as transitory. Companies have reduced capital investment and labor hiring while trimming estimates for 2025 due to anticipated protectionism policies. |
Tariffs Protectionism Inflation Fed Policy | |
| 2025 Q1 |
AIOracle, Microsoft, and Alibaba Group were strong performers driven by their cloud businesses and AI-related services. Oracle's share price rose sharply following AI-related announcements which led to significant re-rating of the shares. The company took opportunity to realize gains from Oracle given the strong AI-driven performance. |
Cloud Software Technology Growth |
Private CapitalThe Private Capital pool comprises direct investments in private companies, predominantly in the UK mid-market. The strategy focuses on cash generative businesses with strong growth potential using low levels of leverage. The agreed sale of Stonehage Fleming represents an excellent outcome, delivering 3.2x multiple on cost. |
Buyouts Mid Market Direct Investment Value Creation | |
DividendsThe Income portfolio aims to deliver an initial yield on invested cost of 3.5% with overall dividend from holdings growing ahead of inflation over the longer term. The board declared an interim dividend of 3.68p per share, reflecting the change in dividend payment profile to 50% of the prior year total annual dividend. |
Income Yield Distribution Growth | |
| 2023 Q4 |
AIRenewed enthusiasm in the AI trade has driven markets to fresh highs, with large deals announced by OpenAI with Nvidia, Broadcom, Oracle and AMD. However, these deals are circular in nature and heavily dependent on OpenAI growing and monetising its user base given its limited current revenue. Considerable uncertainty remains on the pace and degree of monetisation, resulting in increasing risks to the market. |
OpenAI Monetisation Data Centers Chips |
SemiconductorsSemiconductor demand sentiment was lifted by announcements of several OpenAI partnerships with Oracle, Nvidia and Broadcom. These were positive developments in their potential to drive incremental demand for AI-related chips and manufacturing capacity. However, focus remains on end-market demand dynamics necessary to support these capacity plans, particularly given single-customer concentration. |
TSMC Nvidia Broadcom Manufacturing | |
Trade PolicyThe quarter was marked by passage of the 'One Big Beautiful Bill Act' and progress on trade policy as the EU, Japan and South Korea all came closer to trade deals with the US. The US Supreme Court challenged the legality of President Trump's IEEPA-based tariffs with a hearing to begin late this year. |
Tariffs Trade Deals Supreme Court IEEPA | |
| 2023 Q3 |
AIRenewed enthusiasm in the AI trade has driven markets to fresh highs, with large deals announced by OpenAI with Nvidia, Broadcom, Oracle and AMD. However, these deals are somewhat circular in nature and heavily dependent on OpenAI growing and monetising its user base given its limited current revenue. While positive on GenAI potential over the long term, considerable uncertainty remains on the pace and degree of monetisation. |
Artificial Intelligence OpenAI Monetisation Data Centers Chips |
SemiconductorsTSMC benefited from improved semiconductor demand sentiment due to announcements of several OpenAI partnerships with Oracle, Nvidia and Broadcom. These were positive developments in their potential to drive incremental demand for AI-related chips and manufacturing capacity, though focus remains on end-market demand dynamics necessary to support these capacity plans, particularly given single-customer concentration. |
TSMC Manufacturing Capacity Demand AI Chips | |
SportswearAdidas represents a compelling long-term opportunity as the world's #2 player in athletic footwear and apparel. The company has demonstrated resilience through challenging periods and has regained strong momentum under new leadership. Periods of disruption in categories where structural growth tailwinds and economic moat drivers remain intact can present attractive investment opportunities. |
Adidas Athletic Brand Equity Global Distribution Marketing |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Sep 30, 2025 | Fund Letters | Guinness China | ADS.DE | Adidas AG | Consumer Discretionary | Textiles, Apparel & Luxury Goods | Bull | XETRA | athleisure, athletic apparel, Brand Equity, Consumer Discretionary, Football, Germany, Global distribution, Marketing, Sportswear, turnaround | Login |
| Sep 30, 2025 | Fund Letters | Guinness China | ADS.DE | Adidas AG | Consumer Discretionary | Textiles, Apparel & Luxury Goods | Bull | XETRA | athleisure, athletic apparel, Brand Equity, Consumer Discretionary, Football, Germany, Global, innovation, Marketing, Sportswear, turnaround | Login |
| TICKER | COMMENTARY |
|---|---|
| 000858.SZ | We initiated a position in Weichai Power, a leading manufacturer of heavy-duty engines, where we see an opportunity to benefit from growing demand for power solutions linked to data centre expansion. In our view, the market does not fully reflect this growth opportunity, continuing to value the business largely as a traditional engine manufacturer while undervaluing the aftermarket servicing opportunity, which provides a source of high-margin, recurring revenue. The company's capability in both diesel and gas-powered generation positions it well to benefit from growing demand for flexible and reliable on-site power solutions, across both primary and backup use cases. |
| 600036.SS | China Tourism Group Duty Free (total return -24.6% in the first quarter) was the weaker performer over the period, despite early signs of stabilisation in underlying operations. In 4Q25, revenue returned to modest growth (+3% year-on-year), with the gross margin improving 4.8pp to 33.3% and EPS rising 54%. This was driven primarily by a recovery in Hainan, where sales rebounded strongly, aided by policy support and higher spending on premium categories. However the recovery remains uneven as the airport and online channels continued to decline. In addition, a goodwill impairment weighed on reported earnings. Looking ahead, while Hainan momentum has carried into early 2026, the outlook is tempered by structural headwinds, including reduced exposure under new airport contracts and ongoing channel mix pressures. |
| 002008.SZ | Shengyi Technology (-23.1%), a manufacturer of copper clad laminates (CCLs) used in printed circuit boards, was the Fund's top performer in 2025, rising 219.5%. In the first quarter, however, the stock experienced a sharp valuation de-rating, with its forward P/E multiple compressing from 34x to 23x. This largely mirrors the broader de-rating seen across a number of last year's AI-related winners. Despite this, fundamentals remain robust. The company continues to benefit from strong demand linked to AI data centre build-out across both the domestic and export market. |
| 600690.SS | Haier Smart Home (-17.0%), a manufacturer of household appliances, was among the weaker performers in the quarter with a soft 4Q25 print marked by a broad earnings miss and margin compression. The weakness was driven by a combination of China demand softness as subsidies were phased out, elevated commodity costs (notably copper), and significant US tariff and pricing pressure. Positively overseas markets provided some offset, with European sales up 20% and emerging markets delivering strong double-digit growth. However, these were insufficient to offset US and domestic headwinds. Management expects 1Q26 to mark the trough, but near-term visibility remains constrained by weak demand and cost pressures. |
| 688398.SS | Hangzhou First Applied Material (total return +27.4%) is the world's largest manufacturer of solar encapsulation film, which is used to protect solar modules. Its primary raw material is a derivative of oil and gas, and developments in the Middle East have led to a significant increase in input costs. In the short term, First Applied is benefiting from its leading market share, allowing it to raise prices. In addition, the company is selling inventory produced at lower historical costs into a higher price environment, providing a temporary increase to margins. But with inventory days of c.54, this benefit is likely to be short-lived. As inventories are replenished at higher spot prices, the margin uplift is expected to normalise. Looking beyond the next month or two, higher input costs have historically been associated with higher solar film prices, suggesting that the company may be able to pass on higher costs to customers. At the same time, smaller competitors who already under pressure from industry oversupply and weak profitability may struggle to do the same. This could accelerate industry rationalisation and provide First Applied with an opportunity to further consolidate market share. |
| 600563.SS | Xiamen Faratronic (+20.6%) saw fourth quarter revenue growth moderate to 4% while the gross margin declined 1.5pp to 30.0%, reflecting ongoing pricing pressure in the EV segment which also took up a larger share of overall revenue. However, this was offset by stronger operating leverage, with the operating margin expanding 2.6pp to 24.8% and earnings per share (EPS) increasing 15%. More broadly, 2025 performance remained solid, with revenue up 12% and EPS up 15%, underpinned by healthy growth across EVs, solar, Energy Storage Solutions (ESS) and industrial segments. While EV pricing dynamics remain a headwind, management indicated prices are nearing floor levels and the company is maintaining discipline on project selection. Looking ahead, the company is guiding for continued double-digit growth in 2026, supported by EV, industrial and emerging applications such as AI data centres and power infrastructure. |
| 603659.SS | Shanghai Putailai New Energy (+18.5%) is a battery materials manufacturer that saw a notable recovery in both growth and profitability during 2025. In the fourth quarter revenue increased 35%, with the gross margin expanding 7.0pp to 30.1%, while EPS turned positive from a loss in the prior year. Operationally, the company continues to demonstrate strong scale advantages, particularly in separators, where coated shipments grew 56% and base separator sales more than doubled. However, margins experienced some sequential pressure due to a mix shift toward lower-margin equipment, alongside higher impairments in the quarter. Looking ahead, management is guiding for strong volume growth across anodes and separators in 2026, with anode profitability expected to recover as lower-cost capacity ramps. Overall, the outlook remains positive, supported by scale, solid end-demand and improving operating leverage. |
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