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Aberdeen clones Luxembourg China A-share fund for UK market

Forbidden_City_GateAberdeen Standard Investments (ASI) is set to offer UK investors a route into China with the launch of a fund investing in China A-shares in August, subject to regulatory approval.

The ASI China A-share Equity Fund will mirror the $2.6 billion (€2.3 billion) Luxembourg-domiciled Aberdeen Standard Sicav I China A-share Equity Fund, ASI said in a statement on July 22. It will be managed by the same team of 24 people based in locations including Hong Kong, Singapore and Shanghai.

At launch an I share class will be available with an annual management charge of 1%. The minimum investment will be £1 million.

China’s opening up presents the rest of the world with new ways to tap into the growing Asian economies and offers the diversification benefit of consistently lower correlations in Chinese equity versus developed markets. A-shares are also predicted to have strong earnings growth compared to global peers, said ASI.

“Investing in A-shares is one way of accessing the kind of companies that form the backbone of that growth and Chinese authorities are actively encouraging foreign investment,” said Nicholas Yeo, head of equities – China at ASI.

“But investing is not without its challenges. Corporate governance standards are improving but still relatively low and the A-shares market can be extremely volatile,” added Yeo.

Alex Hoctor-Duncan, global head of sales at ASI noted that A-shares “are not for the faint hearted” but could offer attractive opportunities in the long-term.

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