I was wondering if you had been in touch with Yang Liu at Atlantis recently. I have maintained my exposure to China through the Atlantis New China Fortune Fund whose performance over the past year has been significantly worse that the H-Share index, to the tune of about -20% as far as I can see.

"I seem to remember you switched your holding into the Atlantis Healthcare Fund some time ago, very sensibly as it turns out. I go along with your view that China is cheap right now and the easing of monetary policy should lead to a stronger market soon, but maybe the Atlantis New China Fund, which I suspect is now quite a small fund, will not be the best way to play this. Any thoughts would be most welcome."

David Fuller's view Many thanks for your kind words and email which is likely to be of interest to some other subscribers.

I have not had occasion to speak to Yang Liu but in my observation she is a high-beta performer dealing in small cap shares. Consequently, she has tended to underperform in downturns and outperform in upturns. Therefore I would expect her to do well in the China stock market recovery which we both expect. You would not see that diluted by any performance fees until the fund reaches new highs.

A small fund can often recover more quickly than a large one, so I would be inclined to hold on. However, when China next has cause to tighten monetary policy to curb overheating, you may wish to stand aside.