Newsletter guru Jim Oberweis, whose China fund is in the top 1% of funds in its class over the past one, three, and five years, according to Morningstar, says investors look at China the wrong way.
Oberweis tells KapitallWire that it’s not about “investing in China” but instead about finding great companies that happen to be located in China. “Does a great company really care if the GDP growth goes from 9% to 7%?” he said. “Not really. They’re going to do well regardless.”
“We’re stock pickers” he added. “We never invest in stocks that trade over the counter…. The average market cap of our holdings is around $4 billion. We try to find companies that are entrepreneurial in nature. And we want companies that are more beholden to their shareholders than to the government.”
Lately Oberweis’ China fund has been keen on firms in the e-commerce, information technology, and green energy arenas. “That’s where we see smaller companies as having the potential to disrupt incumbents and capitalize off the growing middle class,” he said.
Oberweis does think investors should use funds to invest in China, however, and not pick and choose individual stocks. “You should really use a fund. I have a team in China that does due diligence on the stocks, and then I go out there several times a year to research these companies. You need to get a feel for the boards and figure out who you can trust,” he said.