Principal given QFII licence to trade in China shares

The China Securities Regulatory Commission has granted Principal Global Investors, a US global asset manager, Qualified Foreign Institutional Investor (QFII) status. The designation allows the firm to invest directly in the local China A-share markets.

Jim McCaughan, chief executive of Principal Global Investors, said: “We are pleased to be able to offer clients this valuable opportunity to participate in the Chinese market. The ability to directly invest in the second largest economy in the world is a very attractive proposition for our clients. While the Chinese economy no longer posts double digit growth figures, the market is still expanding and many of our clients are interested in investing locally. China A shares offer investors a good opportunity to further diversify their global portfolios.”

Principal GI says its China strategy is supported through its regional headquarters in Singapore, a regional office in Hong Kong, the global headquarters in Des Moines, Iowa, and coordinated through a representative office in Beijing. The investment team responsible for the capability is located in Hong Kong, Singapore and the United States.

The QFII licence represents the next step in Principal GI’s ongoing involvement in China, an effort that was launched in 1994. In 2005, Principal GI established a joint venture with China Construction Bank, the second largest commercial bank in China. The joint venture, China Construction Bank-Principal Asset Management, manages both equity and fixed income products for local clients.

McCaughan said: “China Construction Bank has been instrumental in helping us through the application process. We would like to thank them for all the advice and guidance.”

Principal GI, part of the Principal Financial Group, manages $242.2bn in assets, primarily for retirement plans and other institutional clients, and offers expertise in equities, fixed income and real estate investments, as well as specialized overlay and advisory services.

The Principal Financial Group is a global investment management leader including retirement services, insurance solutions and asset management, and has $335bn in assets under management, as of Dec. 31, 2011.

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