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Mirae Asset eyes higher China A-shares exposure

Mirae Asset eyes higher China A-shares exposure

Mirae Asset Global Investments has been investing very actively into the China A-shares market since the commencement of the Shanghai-Hong Kong Stock Connect scheme.

Citywire AA-rated Sung Ho Im, who manages the Mirae Asset China Growth Equity fund, said its flagship China Growth strategy already has more than one third of net assets value invested into the A-share market.

It is one of the funds with highest exposure to Chinese A-shares.

‘We are willing to explore further to find more quality stocks with higher earnings growth to increase our exposure to this market,’ he told Citywire Asia.

Im said it was very gradual process to find quality stocks in the mainland market, however.

His China equity funds adopted a pure bottom-up approach to select quality stocks with higher earnings growth with reasonable valuation in the A-share market.

It can be challenging to adhere to a fundamental-driven portfolio strategy in the volatile mainland market, given its more speculative dynamic compared to the Hong Kong market, Im said.

Im said the recent China A-shares inclusion in MSCI index will not have significant impact to his portfolio rebalancing owing to a number of reasons.

First, Mirae Asset already has enough exposure to the mainland market through Stock Connect scheme. Second, the inclusion will have no immediate impact on corporate earnings from fundamental perspective.

Third, Im said he does not expect A-shares market dynamics to change rapidly.

Im said the China A-shares inclusion in MSCI index is more likely to benefit fund managers that do not have any exposure to the A-shares market yet.

While the inclusion of China A-shares into MSCI index is positive to the China’s stock market, the developments will be very gradual.

‘We are not going to change our existing portfolio as a result of the commencement of A-share inclusion,’ he said.

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