Mechelany Advisors'CHINA DEEP VALUE PORTFOLIO was launched on Jan 1, 2021 to capitalise on what Mechelany Advisors' sees as a MAJOR SECULAR ENTRY POINT in some of China's corporate giants. The portfolio is structured to generate 8 % gross dividend yield per annum and benefit from a unique potential for long term capital appreciation due to the exceptional value these stocks offer at the moment.
In a week where most equity markets fell sharply and Chinese indexes tanked, our CHINA DEEP VALUE PORTFOLIO showed great resilience falling only by -2.88 %.
Indexes Weekly Performance
Since the beginning of the year, the CHINA DEEP VALUE PORTFOLIO is
up +9.96 %, outpacing each and every equity market in the world, including China’s CSI 300 Index, the best performing market Year to Date.
Indexes Year-to Date Performance
Our portfolio of Chinese giants is defensive by nature considering its extremely low valuations and high dividend yields and we expect it to outperform significantly in the future thanks to two developments that we see happening fast:
1. The BIDEN administration will review the sanctions policy implemented by his predecessor to harmonise the relationship with China, and especially the ban for US persons to invest in these companies,
2. Chinese banks are on the verge of a major breakout and should start outperforming the rest of the market, in exactly the same way US banks and European banks have started outperforming thanks to positive yield curves and strong economic recovery.
Exane Mechelany CHINA DEEP VALUE Index Certificates
The two index certificates launched by EXANE replicating our CHINA DEEP VALUE PORTFOLIO with leverage also closed the month of February 2021 with significant performances
. The 2x Leverage certificate paying dividends is up +11.90 % since launch
. The 1.5x Leverage certificate capitalising dividends is up +8.40 % since launch
These performances do not include any provision for dividends that will only accrue once paid.
It is not too late to invest in these products as this is only the beginning of the secular re-rating that we expect for those stocks and the highs dividend yields expected for the to certificates, respectively 14% and 10 % per annum.
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