US-based PineBridge Investments has opened a gateway into China’s A-shares market launching a fund aimed at giving international investors “direct access” to the country’s domestic equity market.
China A-shares were only available to the country’s mainland citizens until 2003 due to restrictions on foreign investment previously enforced by the Chinese government.
The PineBridge China A-Shares Quantitative Fund adopts a “quantitatively managed, active strategy that invests in equity and equity-related securities connected to the economic development and growth of China,” according to the global asset management firm.
It is one of the only Ucits products in the market to take on such an approach to Chinese equities, PineBridge has said. Using “local knowledge and a systematic investment process” the fund aims to deliver alpha.
Huatai-PineBridge Fund Management, established in 2004, will provide the local know-how. The Shanghai-based joint venture between PineBridge and Huatai Securities is a leader in quant investing in China, the American fund manager stated.
“International index inclusion and continued economic liberalization in China are expected to drive substantial flows and increasing allocations towards China A-shares,” said PineBridge’s global head of equities Anik Sen.
“The large and liquid domestic A-shares market aims to offer attractive, long-term return opportunities from China’s growth and innovation, and finding the most attractive stocks in this dynamic market requires an established local presence,” Sen added, highlighting Huatai-PineBridge’s expertise in mainland China.
Managing €14.2 billion in assets under management, Huatai-PineBridge is “one of the largest quantitative managers in China” the firm states, with an onshore exchange traded fund (ETF) “featuring one of the largest and most liquid China A-shares ETFs in the world.”
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