NEW YORK (AP) – While the rest of the world scrambles to get out of the crumbling Chinese stock market, a trickle of investors is heading straight into the wreckage.
Managers of Chinese stock mutual funds have seen huge drops many times before, and they even find things to like about them. Instead of taking cover, and preserving cash in their portfolios, this time these managers say they are buying stocks of companies set to take advantage of how the Chinese government is reshaping the economy.
This most-recent plummet has been even swifter and sharper than past ones, but managers of Chinese stock funds say it’s also brought down share prices enough that they’ve been buying companies that they thought were too expensive just a few months ago.
“With a volatile market like China, buy it when the world hates it and sell when no one’s worried,” says Jim Oberweis, who runs the Oberweis China Opportunities fund. “That’s worked pretty well over the last 20 years in China, and now sure seems to me like a period where everyone hates it.”
Only time will tell if he and other Chinese stock fund managers are right. They could have made the same argument after each of the Chinese market’s many sell-offs the last five years, and it wouldn’t have netted them much, if anything.