Sector report: Why caution is essential when investing in China

Despite the continued debate about the strength of China's economic growth, some funds investing in the country have produced impressive returns over the last year. Three of the top four performing funds over the 12 months to the end of March also achieved among the highest annualised three-year returns, marking an emergence of consistency not often associated with the sector. These strong returns are likely to cause advisers to look again at China for a portion (albeit a small one) of clients' portfolios, particularly as part of emerging markets exposure. However, considering the range...