Japan's biggest China fund is focusing on consumer stocks in a bet domestic demand will swell in the world's most-populous nation, said Yoshinobu Uehara, who runs the fund for Sumitomo Mitsui Asset Management Co.
The New China Fund, with more than $800 million in assets, is buying shares in small-cap retailers, supermarkets and education- and Internet-related entities, Uehara said in Tokyo. Consumer companies will make up a large part of the world's third-biggest economy as wages and purchasing power increase, according to Uehara.