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The article was first published in 2023 at the launch of Endowus Satellite Portfolios and was updated on 3 Nov 2025, following recommended portfolio changes to Endowus Satellite Portfolio - China Equities. The RPC is part of Endowus’ commitment to source funds that will optimise the portfolios.

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Introducing Endowus Satellite Portfolio - China Equities

The Endowus Satellite Portfolio - China Equities is designed to achieve long-term capital appreciation by providing exposure to China’s structural growth opportunities via allocations to A-shares, H-shares and US-listed ADRs, with a focus on A-shares. 

The Portfolio is intended for investors who seek significant alpha opportunities and are looking to invest in a diversified and efficient China equity portfolio for the long term.

• Capture alpha potential: China is an inefficient market, creating alpha opportunities for active investors to exploit. 
• Best of both worlds: Broad and diverse exposure to China's structural growth opportunities achieved via exposure to A-shares, H-shares and ADRs, with a focus on A-shares, 
• Managed by leading China specialists: Navigate China's markets in a multi-manager portfolio through leading experts who have invested in China for decades, such as BlackRock, Fidelity, JPMorgan Asset Management, T. Rowe Price, and Schroders.

Read more: The alphabet soup of China equity markets

The latest recommended model portfolio change aims to help the portfolio better meet its objective. This is achieved by broadening the portfolio’s exposure to structural growth opportunities by increasing allocation to the onshore market and enhancing portfolio resiliency across market cycles by improving style diversification and optimising manager selection.

Funds in the China Equity Satellite Portfolio

The rationale behind key changes

A tilt towards A-shares to further tap into structural growth opportunities

China’s onshore equity market, mainly A-shares, presents a broader opportunity set to capitalise on structural growth opportunities. Among these Shanghai- and Shenzhen-listed companies, the sector breakdown is relatively well-balanced, as well.

Broadened exposure to structural growth opportunities

Sector breakdown of MSCI China All Shares Index by listing locations (%)

Innovation and the development of new technologies have incrementally become the focal point of the growth areas of China. The A-share market is home to these companies that contribute to the country’s shift to a consumption-driven, innovation-led economy. There is no shortage of examples: Consumer goods, healthcare, technology, and high-end manufacturing. 

This contrasts with the traditional access to Chinese markets, including offshore markets like Hong Kong, which are largely concentrated in the mega-cap internet names across the communications services and consumer discretionary sectors. 

For the Portfolio, allocation to funds with high Greater China markets is thus removed to make way for an increase in targeted exposure to A-shares.

Diverse approaches to create a balanced portfolio across sectors and styles

By including funds with distinct investment strategies, the Portfolio is well-diversified across sectors, styles, and market capitalisations, supporting a smoother investment journey in China’s volatile markets.

Funds within the portfolio are classified into three broad categories based on the role they play. The allocation across these categories is strategically designed to build a portfolio that not only delivers beta to onshore markets but also has the potential to achieve strong up-capture. 

Read more: FOMO on China stock rally: Are you really missing out?

Fund roles within the Portfolio: Core, high-octane, and diversifier

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Refining manager line-up, consolidating overlapping roles and removing lower conviction funds

We have consolidated allocation to funds that adopt similar strategies and exhibit high correlation holdings overlap. Funds with a lowered conviction for reasons such as a recent change in portfolio manager among other factors, have also been removed from the Endowus China Equity Portfolio.

Fund correlation, listing and sector allocation

Owing to the distinct investment approaches of each underlying fund, the common holdings overlap is fairly low, making them complementary allocations within a portfolio context. 

The top 10 holdings for the portfolio illustrate strong differentiation vs simply buying the index, with mega-cap stocks such as Kweichow Moutai and Tencent at an allocation of less than 5% each.

Differentiation and diversification: Common top 10 holdings among funds

Note: Using Bloomberg. Common holdings between funds were calculated as the ratio of the sum of shared holdings to the total holdings within the same asset class in each fund. Data as of 13 October 2025.

Allocation of A-, H-shares, ADRs, and other

The new version of the Portfolio features a higher allocation to the onshore equity market represented by A-shares, in line with the objective to provide a broader exposure to structural growth opportunities in China.

Sector allocation

Sector allocations are more balanced with the introduction of the BlackRock BGF Systematic China A-Share Opportunities Fund as a core position within the portfolio, providing beta to onshore markets with a low tracking error.

Portfolio performance: Comparing the old and new Portfolios

While hindsight often leads to better-optimised returns compared to the previous iteration, we believe that the new portfolio will deliver improved risk-adjusted returns in the long term through this recommended portfolio change.

China Equity Portfolio: Historical performance & risk statistics

The tables above show that the New Portfolio has outperformed the current version on a one year basis and is broadly similar on a 3 year basis with a lower max drawdown. Compared to the All China Index the new portfolio has underperformed on a one year and 3 year basis given the smaller weight to Greater China and H shares. However, it has outperformed slightly since inception in Jan 2021. Moreover, it has exhibited a lower standard deviation and max drawdown.

‍Learn more about how you should approach a core-satellite portfolio investment strategy.

Frequently asked questions:

1. How do I accept the Recommended Portfolio Change?

You can view and opt in for the changes via any of the 3 options below:

• Log onto your Endowus account.
• Click on your “China Equities” goal (or you might have renamed it differently on your own). 
• On the top right, click “Manage goal”, then “Modify goal”.

• Click “Remove funds” to remove the funds that are no longer in the model portfolio, and click “Add funds” to select the funds that are newly introduced to the model portfolio.
• Input the fund allocations as recommended by the model portfolio.
• Review and confirm by clicking "Continue" before you proceed with the changes

The entire process will take 5 to 10 business days to complete. A full redemption cannot be performed until the rebalancing process is completed.

2. Why does Endowus recommend portfolio changes?

Our Investment Committee is constantly evaluating the funds in our advised portfolios and the wider investment universe. If we feel that other funds can better express our asset allocation views at a lower cost or improve the risk-return profile of the portfolio, we will recommend a portfolio change to our clients.

3. What is the Endowus Core-Satellite approach?

Most investors should begin with an allocation to the Endowus Core strategies. All core portfolios must be globally diversified, have a strategic passive asset allocation (SPAA), and be low-cost. It is advisable that all investors begin with a meaningful asset allocation to core portfolios for their essential financial goals before extending their investment holdings to Satellite positions.

Read more: How to approach core and satellite investing with Endowus

4. Why is the recommended portfolio change suitable for me?

Monitoring the investments in your portfolio and trying to optimise for improvements can be a time-consuming and complicated affair. This is where working with a trusted financial adviser like Endowus can help you improve the way you invest. We represent non-institutional investors to negotiate for more efficient share classes with established fund management companies. 

Have more questions? Schedule a 1-on-1 appointment with our SFC-licensed financial advisors at any time!

At Endowus, wealth management for everyone

The China Equities model portfolio offers investors a convenient and effective way to build a diversified portfolio that can help to minimise risk and potentially increase returns.

With digital wealth platform Endowus, investing is now made low-cost and accessible for every season in life, investing goal, and risk appetite. Make time your biggest asset and begin your investing journey with Endowus today. Start investing towards your goals from just HK$10,000.

At a low, fair, and transparent fee, both retail and professional investors can access Best-In-Class Funds and stand on the shoulders of financial giants. And with our industry-first 100% Cashback on trailer fees, save up to 50% or more on your investment fees.

The Endowus Investment Office is constantly monitoring your advised portfolios and searching for new options that will improve these portfolios. Opt in for the recommended portfolio change today to upgrade your Portfolio. Get more details about the China Equities model portfolio here. Read about the other Endowus model portfolios in this article. For an overview of all the funds available on the Endowus Fund Smart platform, refer to our investment funds list. 

Start investing with Endowus in 4 simple steps.

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Risk Warnings

Investment involves risk. Past performance is not an indicator nor a guarantee of future performance. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested. 

Opinions

Whilst Endowus HK Limited (“Endowus”) has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies or typographical errors.

Any forward-looking statements, prediction, projection or forecast on the economy, stock market, bond market or economic trends of the markets contained in this material are subject to market influences and contingent upon matters outside the control of Endowus and therefore may not be realised in the future. Further, any opinion or estimate is made on a general basis and subject to change without notice. In presenting the information above, none of Endowus, its affiliates, directors, employees, representatives or agents have given any consideration to, nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Therefore, no representation is made as to the completeness and adequacy of the information to make an informed decision. You should carefully consider (i) whether any investment views and products/ services are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances.

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