Fund manager discusses China investments

May.20.05 | About: AMERICAN DAIRY (ADIY)

According to an article in Barron's (subscription required), James Cullen's Pioneer Value Fund has outperformed the broader
market and similar value funds in the past 12 months with a trailing
total return of 19%.
About a third of Cullen's portfolio is made up of foreign stocks. Here are his China sector and company recommendations:

On Recent Sales

....In the past year, we sold a couple energy names and really
started to focus on energy stocks with the potential to be acquired
rather than the large multinational energy stocks. 

We owned Chevron (ticker: CVX). We owned BP (ticker: BP). We owned PetroChina (ticker: PTR). They all did very well for us.

 On Chinese Middle-Class Demand

....India and China are
going to be growth markets. Roughly 40% of the global population is in
those two markets. All the outsourcing that we are doing in both
countries is providing a lot of income spread out over a lot more
people. What is the growing middle-class demand going to be? Food is

On Owning Diageo (ticker: DEO)

 ....At a Chinese wedding in the U.S., instead of putting a bottle
of champagne on the table, the host puts out Johnnie Walker Red Label.
I thought it was the most unusual thing. Diageo never broke out its
international business very well. They did more recently and said the
fastest-growing part of the international business is Johnnie Walker in China.

Comment: Read here for quotes from Diageo's latest conference call.