CICHF - Templeton Dragon Fund Inc Q1 2025 Commentary

2025-05-08 09:10:00 ET

Summary

• Chinese equities advanced in Q1 2025, driven by government stimulus and technology sector support, with the fund returning 10.80% at NAV.
• Key performance drivers included Xiaomi's EV launch, Alibaba's AI investments, and New Oriental Education's disappointing financial results.
• Despite US tariffs, China's large domestic market and policy measures make us optimistic about economic growth and corporate earnings recovery.
• We believe Chinese equities are attractively valued, with improved market sentiment and policy support driving long-term returns despite geopolitical risks.

Performance Review

Chinese equities advanced during the first quarter of 2025 on the back of continued stimulus measures from regulatory authorities. The China 2025 Government Work Report’s focus on technology was viewed by many investors as a sign of support, which sent technology-related stocks higher. The Chinese government’s plans to boost consumption across a multitude of sectors were also revealed....

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