All holdings in the fund must pay a dividend, as this forces management to be disciplined. Not overpaying for a stock is another protection – they typically invest only where they believe a stock is undervalued by at least 30%. The strategy has a great track record compared with its peers and, as it doesn’t invest in the onshore A-share market, is far less volatile.
Darius McDermott is managing director of FundCalibre
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