Invesco has unveiled two new strategies providing investors exposure to China A-shares – one quantitative, the other active.
Both Ucits funds aim to provide long-term capital growth investing in firms listed on the Shanghai and Shenzhen stock exchanges.
Each strategy, although targeting the same market, employ different investment styles to “accommodate different investment needs”, according to the US-headquartered fund house.
Chin Ping Chia, Head of China A Investments, business strategy and development at Invesco, said: “We believe the China A-share market is one of the largest and most exciting investment universes that is opening up to global investors.”
The Invesco China A-Share Quality Core Equity Fund, managed by Chris Liu, will focus on “attractively-valued companies with sustainable growth potential”.
The portfolio, consisting of around 30 to 40 stocks, will be constructed with a bottom-up approach looking for companies with “strong business models and sound balance sheets”.
“Because the market remains relatively young with areas of inefficiency, we believe an active approach will allow us to capture these opportunities,” Chin Ping Chia, based in Hong Kong, added.
Meanwhile, the Invesco China A-Share Quant Equity Fund takes, as the name suggests, a more algorithmic approach to the Chinese stock market. It will be managed by Alex Tavernaro based in Frankfurt and Andrew Tong in Hong Kong.
In 2019, MSCI increased the weight of China A-Shares in its indices by increasing the inclusion factor from 5% to 20%. This comprises 253 Large and 168 Mid Cap China A-Shares.
The firm’s head of Asia Pacific said, Andrew Lo, said: “As China begins to open up to other markets internationally, we foresee rising interest from global investors to access China in A-Shares, which makes the need for dedicated products greater than ever.”
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