Insto investors seek dedicated China exposure
Institutional investors are increasingly investing in dedicated China funds rather than just via broader global emerging market strategies.
font-weight:normal">Research by bfinance found onshore A-shares funds and All-Shares funds, which blend offshore and onshore exposure, were becoming increasingly used.
font-weight:normal">This was the result of rising awareness of the different markets, the longer track records of A-shares funds and the performance divergence between China and GEM markets, particularly during the recent market turmoil.
font-weight:normal">The MSCI EM index lost 23.6% in the first quarter of 2020 while the MSCI China A index lost just 9.7%.
font-weight:normal">There were more than 60 A-shares funds, of which 40 now had track records longer than three years. In the All-Shares space, there were less than 20 but managers were indicating they were willing to offer this type of strategy if there was client demand.
font-weight:normal">Weichen Ding, senior associate at bfinance, said: “It is increasingly untenable to remain on the sidelines of the world’s second largest equity market. More investors are beginning to take a strategic approach, as one might traditionally do with markets such as Japan, Europe and the US. Investors examining this space at the moment will encounter a landscape of products and strategies that has changed a great deal during the last five years.”
AUTHOR
Laura Dew
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