On 31 July 2023, Mike Shiao stepped down from his role as portfolio manager of Invesco Greater China after leading the strategy for 15 years, with Raymond Ma taking over. While we recognize Ma as a seasoned investor, we have reservations about the team’s instability and need more time to assess how Ma would work with the Invesco team to implement his process effectively. As such, the strategy continues to earn Average ratings on both the People and Process Pillars.
Incoming portfolio manager Raymond Ma is an established portfolio manager and a Greater China veteran with 23 years of experience. Prior to joining Invesco as CIO of China and Hong Kong in April 2023, he spent 15 years at Fidelity, where he has built a strong long-term track record on Fidelity Greater China, which he managed between July 2012 and March 2021. Ma came across as a passionate investor and impressed us with his deep knowledge and familiarity with the Greater China market. That said, we remain watchful of the supporting team’s stability and resourcing. The Invesco Asia ex-Japan team has lost eight Greater China portfolio managers and analysts since 2021, and its Greater China dedicated resources have shrunk to nine members compared with 12 two years ago.
The strategy will remain bottom-up driven and growth-oriented, but Ma brings his own investment process, focusing on companies with strong growth and cash flow generation ability. In contrast to Shiao’s approach, which focuses more on established companies with sustainable growth, Ma has a broader definition of growth and is flexible in allocating the portfolio among sustainable growth, higher growth, underappreciated growth, and turnaround opportunities. Ma also expects to run a more-diversified portfolio of 40-80 names compared with the previous range of 30-60, with lower expected tracking error and active share. This is the same investment philosophy and process that Ma previously applied to Fidelity Greater China, which has yielded strong long-term results. However, the success of this flexible approach heavily depends on Ma’s investment savvy and the supporting team’s research quality. Given the recent team turmoil and Ma’s short working history with the team, we need to closely monitor the effectiveness of the process’ execution and take a cautious stance on the strategy for now. |
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