Affin Hwang Asset Management has launched a China A-shares fund targeting sophisticated investors in Malaysia.
The spokesperson for Affin Hwang said the feeder fund is set to benefit from China’s commitment to opening up its capital market, as well as the inclusion of China A-shares into the MSCI Emerging Market Index.
The gradual inclusion of China A-shares into the MSCI Emerging Market Index would see sizeable fund flows into that asset class. In the event of full inclusion, the total weightage of China equities could make up to 40% of the entire index weight.
What’s more, the indiscriminate sell-off in emerging markets last year has created an attractive entry-point for investors to reposition themselves for the long-term and scoop up bargains now, the spokesperson said.
Shi, who heads China equities at UBS Asset Management, said the recent policy developments in China could also signal a turning point for Chinese stock markets.
The new policy support is expected to positively impact investor sentiment this year and will help, in part help decrease the risk in Chinese equity market.
The feeder fund will invest at least 80% of the fund’s net asset value (NAV) into the target fund and a maximum of 20% of the fund’s NAV into money market instruments, deposits and liquid assets.
The fund is suitable for those who have a long term investment horizon and a high risk tolerance. The UBS China A Opportunity fund is also available for accredited investors under the restricted scheme in Singapore.