Tencent's Giant Rally Is a Problem for Some China Investors
- A ‘real headache’ if Tencent continues surge: UBS’s Shi Bin
- Allocations are restricted to 10 percent for a single stock
A pedestrian walks past headquarters in Shenzhen, China.
Photographer: Qilai Shen/BloombergThis article is for subscribers only.
When it comes to China’s biggest technology stocks, some investors are finding there can be too much of a good thing.
Take Shi Bin, a portfolio manager at UBS Asset Management (Hong Kong) Ltd. One of the top stocks in his UBS (Lux) China Opportunity equity fund is Tencent Holdings Ltd., which has soared 70 percent this year. So far, so good. But it’s hard competing with the likes of the MSCI China Index because he is hobbled by regulations that restrict funds’ allocation in any single stock to 10 percent. Tencent’s MSCI China weighting is 16.3 percent.