Schroder Investment Management (Schroders) has introduced a small change to the investment policy of its China Opportunities fund, a sub-fund of the firm’s Luxembourg Sicav Schroder International Selection Fund.
If the fund will still invest at least two thirds of its assets in Chinese stocks and other Chinese securities, the fund will see its investment share in China A-shares rise to 30% from 10% previously, through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect programs. The new policy will be effective as from 1 February 2018.
The firm assesses this change will bring more flexibility to the fund. The Schroder International Selection China Opportunities fund can also invest directly in B-shares and H-shares.
Another adjustment is that the fund manager will be able to use derivatives in order to achieve investment gains whereas they were hitherto used to reduce risk in the portfolio or for management purposes.
The Schroder International Selection China Opportunities fund, launched in February 2006, is managed by Louisa Lo and had $1.23bn (€993m) of assets under management as of 31 December 2017.
At that date, the top five holdings of the fund included Tencent (9.9%), Alibaba (9.5%), China Construction Bank (6.9%), Industrial & Commercial Bank of China (5.9%) and Ping An Insurance Group of China (5.5%).
China A-shares were included by MSCI into its Emerging Markets and World indices in June 2017.