Russell launches China A Equity fund to offer investors access to the Asian market
Global asset manager Russell Investments has launched China A Equity fund, a fund designed to offer investors access to the Asian economy.
The A Share market has over 2,300 Chinese companies listed.
The fund provides exposure to a range of investment strategies aiming to capitalise on the rich environment for active managers and, as a multi manager fund, provides diversification across a number of managers.
The fund is supported by a specialist manager research team based in Shanghai through Russell’s joint venture Ping An Russell Investment Management. On-the-ground presence will enable Russell to react quickly and take advantage of opportunities in the fast-evolving asset management industry.
At launch, this institutional fund comprises two high conviction managers and a large cap investment strategy portfolio which helps to balance the risk characteristics of the portfolio. The two external managers: Beijing Runhui Asset Management Co., Ltd. (“Cephei Capital”) and Bank of Communications Schroder Fund Management Co., Ltd. (“Bocom Schroders”) have been selected on the basis of their perceived strengths in China A share investing and the complementary nature of their investment approaches.
The fund structure will evolve over time and a third manager is expected to be added in the coming months.
“Over the past two decades, China has grown at a rapid pace to become the world’s second largest economy and this growth has been mirrored in the development of the equity market. The A share market now represents an opportunity set that by some measures is as large as the rest of the emerging markets combined and therefore demands attention from investors when they consider strategic allocations within their global equity portfolios,” said Scott Crawshaw, portfolio manager at Russell.
According to the manager, the breadth and depth of the A share market allows a wider exposure to domestic growth opportunities which are otherwise inaccessible to foreign investors.
“With valuations in China currently trading amongst the lowest in Asia, and the pace of growth likely to remain higher than the developed world, the long-term investment case is strong,” he said.