David Fuller's view

I closed my China H-Shares (HSCEI) (daily & weekly) long trade this afternoon because many stock markets are correcting gains and I did not want to risk any further profit erosion in this position.  Accordingly, my longs which had been rolled into the May contract at 14750.6 on 26^th April, were sold today at 13873.  These prices include all spread-bet dealing costs.  There is a possibility that I sold this inexpensive Index just as it was beginning to appear oversold.  Conversely, it could easily react further in nervous markets during a more lengthy consolidation.

China is the second largest position in my personal long-term investment portfolio, mainly held in the JPMorgan Chinese Investment Trust.  I have absolutely no intention of selling any of this position which currently sells at a discount to NAV of -12.496%, according to Bloomberg.  This is mainly invested in the Hong Kong Hang Seng Index (daily & weekly) (p/e 11.72 & yield 3.02%).  It also has positions in the H-Shares shown above, also known as the Hang Seng China Enterprises Index (p/e 10.09 & yield 3.08%). 

My long-term strategy with China remains one of adding to JMC (shown above) or similar instruments on significant corrections.  We could easily see two or three of those over the next few years, and they are buying opportunities.  I have a similar strategy with India during Narendra Modi’s leadership, and this remains my largest position.  Having previously said that 2015 was primarily a year of consolidation for India, we now have a 10% correction for the BSE Sensex Index (daily & weekly).  It could come a little lower in the current environment and if so I am likely to add to my core position in the JPMorgan Indian Investment Trust, which is currently selling at a discount to NAV of -13.969%.