Emerging markets specialist Ashmore has launched a Chinese equity fund that allows investment in both onshore and offshore equity markets in China. According to Ashmore, the All China Equity fund has been launched in response to sustained investor demand.
The fund aims to offer broad exposure to investors to the Chinese equity market with a bottom-up stock picking investment approach. The company has also specified that it will make investments in companies which have sustainable earnings growth over the mid- to long-term and can provide structural improvements through research and development as well as reform.
Domiciled in Luxembourg, the fund has a minimum investment of £3,000 and a management fee of 1.95 per cent for the retail share class.
The company manages a dedicated China equity strategy, investing primarily in A-shares under the renminbi-qualified foreign institutional investor (RQFII) license which it acquired in 2014. The license allows a small number of Chinese financial firms to establish renminbi-denominated funds in Hong Kong for investment in the mainland.
Chinese companies are generally under-researched, according to Ashmore and through analysis, the fund aims to bring out attractive opportunities for investors who are hungry for emerging market equities.
Comment
The timing of this fund’s launch couldn’t be worse, especially as the Chinese markets are in a state of turmoil. Latest reports suggest that more and more foreign funds are reducing their exposure to mainland Chinese equities since markets have not shown any signs of stabilising.
But Ashmore has experience of working in emerging markets, especially China, for more than a decade
now so investors will hope the fund managers can manage risks in order for a better return.
The fund managers claim to have seen growing investor appetite for investment in China and more clients looking to increase allocations within the emerging markets space.
The fund offers flexibility to investors to be able to invest in both onshore and offshore funds and, due to Ashmore’s bottom-up stock picking approach, the companies will be well researched before being included in the portfolio.
Fund facts:
- Fund invests in onshore and offshore Chinese equity market
- Bottom-up stock picking investment approach
- Domiciled in Luxembourg
- £3,000 minimum investment
- Annual management charge of 1.5 per cent
- Access to China H-shares, ADR markets and A-shares
