OMGI overhauls China fund mandate

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OMGI overhauls China fund mandate

Old Mutual Global Investors plans to adjust the mandate on its $67m (£44m) Greater China Equity fund to allow “greater freedom” to focus on mainland China.

As part of changes which are subject to regulatory approval, the vehicle will be renamed as the Old Mutual China Equity fund from November 20 and have flexibility to focus more on mainland Chinese equities, with the specific requirement of a minimum exposure to Taiwan removed.

According to the company, this will allow manager Diamond Lee to “invest in Taiwanese securities at his discretion” and “adjust as necessary to the constant changing dynamics of the market”.

The fund will continue to be unconstrained by its index, but in order to reflect the changes to its mandate the benchmark index for referencing long-term performance will change from the MSCI Golden Dragon index to the MSCI Zhong Hua 10/40.

Mr Lee, who has managed the fund since January 2015, said: “ I hope to add more value for clients by having greater freedom to focus on China, whose importance is only likely to rise in the long term.

“It is well known that the pace of Chinese growth is slowing down gradually, however we firmly believe this transition will offer a multitude of opportunities, as the economy transitions from investment to consumption-led, and the growth engine switches from manufacturing to services.”

According to FE Analytics the fund has returned 15.4 per cent over five years, compared to 5.1 per cent from the Investment Association China/Greater China sector and 18 per cent from the MSCI Golden Dragon index.