Affin Hwang AM launches China A Equity Fund

KUALA LUMPUR: Affin Hwang Asset Management Bhd (Affin Hwang AM) has launched the Affin Hwang World Series - China A Opportunity Fund which provides access to the vast opportunities in China’s domestic equity market.

Affin Hwang AM said the fund was a wholesale feeder growth fund that allowed investors to invest in a collective investment scheme, namely the UBS (Lux) Investment SICAV – China A Opportunity Fund (target fund).

“The target fund is a Luxembourg-domiciled fund managed by UBS Asset Management.

“To achieve its investment objective, the fund will invest a minimum of 80 per cent of its net asset value (NAV) into the target fund and a maximum of 20 per cent of the fund’s NAV into money market instruments, deposits and/or liquid assets,” it said in a statement yesterday.

Affin Hwang AM chief marketing and distribution officer Chan Ai Mei said as China continued on its roadmap towards liberalisation and demonstrated its commitment to opening up its capital market, the company expects the fund to be a beneficiary of inflows as reforms take root.

“The gradual inclusion of China A shares into the MSCI Emerging Market Index would see sizeable fund flows and draw greater global investor interest. In the event of full inclusion, the total weightage of China equities could make up to 40 per cent of the entire index weight,” she said.

Chan said the fund was a welcome addition to its World Series that would allow investors to tap into opportunities in China’s domestic or A-share market.

She said the indiscriminate selloff in emerging markets last year has created an attractive entry point for investors to reposition themselves for the long term and scoop up bargains.

“We advise investors to be patient when investing in China and stay focused on its longer-term prospects,” Chan said.

On the outlook for China, UBS Asset Management head of China equities Bin Shi said the recent policy developments could signal a turning point for China’s stock markets and could be an opportunity for investors to add or invest in China equities.

He said the Chinese government has opened up key industrial sectors to investment from overseas companies and reversed their position on limiting investment into China that has been a key source of disagreement in the US-China trade dispute.

“These moves can help boost investor confidence which has been hurt by the government’s previous policy attitude. The new policy support is fully appreciated by the market.

“However, going into 2019, these will positively impact investor sentiment and will help, in part, decrease the risk in the Chinese equity market,” Bin added. — Bernama