JPMorgan Asset Management (JPMAM) has unveiled a new SFC-authorized and actively managed RQFII equity fund in Hong Kong.
Known as JPMorgan China A-Share Opportunities Fund, the RQFII fund will utilize part of the investment quota from the State Administration of Foreign Exchange (SAFE) and allow investors to have direct exposure to China A-share investments.
The new fund will invest primarily in A-shares, enabling investors to capture the investment potential of China domestic equity market.
In addition, the fund will invest at least 70% or more of the portfolio to China A-Shares, 10% to PRC-issued equity funds (including ETFs) investing in A-Shares, 15% of the portfolio in BShares and up to 30% in Chinese stocks listed in Hong Kong and the US and non-PRC-issued equity funds (including ETFs).
The fund will be run by a 34-member investment team focused on Greater China, with investment research support from China International Fund Management, a joint venture between JPMAM and Shanghai International Trust.
With a minimum subscription of US$2,000, the fund will have an initial charge of 1% and will be available for subscription until 30 September 2014.
Ancus Mak, vice president, retail distribution at JPMAM, said: "Our Fund aims to capitalise via extensive exposure to A-shares across sectors and to achieve long-term capital appreciation by participating in China’s New Economy. In addition, this RMB-denominated fund is suitable for investors who hold RMB and wish to participate in the longer-term globalization of the currency."
Lilian Leung, fund manager of JPMorgan China A-Share Opportunities Fund, said: "We believe that further liberalization of China’s A-share market will gradually change the investor profile. At the moment, retail investors in that market account for as much as 80% of market turnover and they tend to focus more on small-to-mid cap stocks.
"At present, inflation is contained, property prices have eased and we are already in the midst of a consumption slowdown resulting from a combination of the anti-corruption campaign and an economic slowdown.
"We are positive on the outlook and well positioned for a cyclical recovery with exposures to property, high beta mid-sized banks and diversified financial companies. We also favour the consumption and technology sectors which will likely benefit from the long-term structural changes in the economy."