Talking Point  

Schroders launches onshore Chinese equity fund

Schroders launches onshore Chinese equity fund

Schroders has launched a new fund focused on investing in onshore equities in China.

The Schroder ISF China A-Share will provide investors with access to innovative and fast-growing companies in the world's second largest equity market, with the aim of providing capital growth. 

The strategy currently invests in onshore China A-shares through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect.

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The onshore China equity market offers more than 3,500 stocks and has a low correlation to other major equity markets.

The investment team will focus on small to mid-cap stocks with a quality bias and take an active, bottom-up approach to finding the best opportunities.  

John Troiano, global head of distribution at Schroders, said: "Schroders has moved quickly to act on the huge opportunity that the opening of the China A-share market has presented for our international clients.

"We believe that this active, bottom-up approach will provide investors a strong source of growth, through one of the fastest growing markets in the world; and portfolio diversification, through an equity market that is largely underrepresented in global portfolios and has low correlation to other markets."

Schroder ISF China A-Share will be managed by Schroders' Asian Equities team, with Jack Lee, who is head of China A-share research, as the lead investment professional.

Mr Lee said: "Through our investment lens, we are able to identify exciting opportunities in the dynamic mid to small cap space, particularly within the fast-growing sectors such as technology, healthcare and the consumption space. 

"It is in the small to mid-cap space that the onshore China market features many compelling companies that demonstrate a combination of strong management and product leadership in the fastest growing, soon to be the largest, internal marketplace in the world."

Commenting on the launch of the fund, Alan Chan, director and chartered financial planner for London-based IFS Wealth & Pensions, said: "We don't normally consider recommending a newly launched fund although exceptions may apply. 

"We would like to see a solid track record for the fund and for it to have a reasonable size under management too before we consider it."