AMP gets wake-up call over its beleaguered China Fund

Jack Lowenstein

Ellerston Capital

On Friday AMP goes to court hoping for permission to use AMP Life’s 36% stake in its underperforming China Fund (AGF) to fight off activist shareholders who want the fund wound up because of the unacceptable discount between its NTA and its share price. On Wednesday AMP got a fresh blow when proxy adviser ISS told investors to support the wind-up. But why does AMP Ltd, the parent company of both AMP Life and AMP Capital let this fight continue? AMP Life could have made 4.3% per year more money investing in China “A” shares futures than in the AGF! Over ten years that compounds significantly If the Fund closes AMP Life and AMP Ltd make a gain of roughly 10 cents or $17m in profit. After expenses and tax we estimate AMP Capital makes just $2.2m a year from running the Fund. So AMP is damaging its brand to fight for negative whole of firm economic returns. Very silly indeed. Our thoughts in more detail here: (VIEW LINK)


Jack Lowenstein
Joint Chief Investment Officer
Ellerston Capital

Jack co-founded Morphic Asset Management in 2012. As a stock picker Jack has invested in a variety of markets and sectors, but developed in-depth knowledge of markets in Asia-Pacific region as well as global finance and resources sectors.

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