New fund offers unique access to China
Karma Wilson
AMP Capital has launched a fund that will provide Australian investors with the opportunity to access China’s growing economy for as little as $2,000.
The AMP Capital China Growth Fund is giving retail and institutional investors exposure to China A shares of companies listed on the Shanghai or Shenzhen stock exchanges.
“The A share market is quite unusual in that unlike most markets it doesn’t show any correlation to other equity markets,” AMP Capital Investors senior portfolio manager for Asian investments Karma Wilson said.
“The China share market hasn’t shown correlation to Australia or the world or even Asia or H Shares. So from that perspective it’s a very good diversifier, especially in a growth portfolio,” she added.
AMP Capital is seeking to raise up to $280 million through the initial public offering of up to 280 million units, and the fund is expected to be listed on the Australian Stock Exchange next month.
“This really is a rare investment opportunity for Australian investors. It has not been available to retail investors in Australia before,” AMP Capital Investors director, investments Asia, Kevin Talbot said.
“It does give you exposure to China’s growing economy, so we expect the beta or the market returns of the fund to be extremely strong,” he explained.
UBS Global Asset Management and China Life Insurance Asset Management, the largest institutional investor in China, have been appointed sub advisers.
Under this role, UBS will assist in determining appropriate investments, while China Life will provide local stock coverage and currency views.
The fund will seek to outperform the S&P/CITIC 300 Total Return index and has been designed to provide investors with long-term capital growth, but not for regular income payments.
AMP Capital Investors head of private clients Giles Craig said: “In terms of distribution … we’ve had broad support from brokers and planners. We are expecting further support from planners, not just AMP Financial Planning, but non-aligned planning groups as well.”
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