Insto investors seek dedicated China exposure
Institutional investors are increasingly investing in dedicated China funds rather than just via broader global emerging market strategies.
font-weight:normal">Research by bfinance found onshore A-shares funds and All-Shares funds, which blend offshore and onshore exposure, were becoming increasingly used.
font-weight:normal">This was the result of rising awareness of the different markets, the longer track records of A-shares funds and the performance divergence between China and GEM markets, particularly during the recent market turmoil.
font-weight:normal">The MSCI EM index lost 23.6% in the first quarter of 2020 while the MSCI China A index lost just 9.7%.
font-weight:normal">There were more than 60 A-shares funds, of which 40 now had track records longer than three years. In the All-Shares space, there were less than 20 but managers were indicating they were willing to offer this type of strategy if there was client demand.
font-weight:normal">Weichen Ding, senior associate at bfinance, said: “It is increasingly untenable to remain on the sidelines of the world’s second largest equity market. More investors are beginning to take a strategic approach, as one might traditionally do with markets such as Japan, Europe and the US. Investors examining this space at the moment will encounter a landscape of products and strategies that has changed a great deal during the last five years.”
AUTHOR
Laura Dew
Recommended for you
First Sentier Investors has announced it will close four of its Australian investment teams amid a simplification of the business with $14 billion expected to be returned to investors.
Over 90 finalists have been chosen to compete at the 36th annual Fund Manager of the Year Awards, to be held in Sydney on 13 June.
Clients may be asking their adviser whether there is still value in the US technology names after their rally, but Fidelity International’s Lukasz de Pourbaix believes they can still offer upside.
T. Rowe Price has moved overweight on global equities in its multiasset funds and appointed a chief operating officer for Asia-Pacific.
