Just buying China broadly will no longer deliver returns and investors now need to be selective with their mainland stock picks, said Michael Chiu, Asia Pacific equities investment director at HSBC.
"China is no longer a beta market. In the past, people would think about China as an emerging market. They would just close their eyes and buy China," but that no longer works, Chiu said at the AsianInvestor Southeast Asia Institutional Investor Forum in Singapore on Wednesday..
On Wednesday, the Shanghai Composite rallied more than 1 percent to about 2,260, a three-month high, however the index remains well below its all-time high of around 6,088, touched in 2007. The Shenzhen index tacked on 1.0 percent to close at about 1,064 Wednesday, not even close to its all-time high of around 1,550, touched in 2008.
(Read more: We're reassured by China reforms: World Bank)