Matthews Asia awarded QFII licence to invest in China’s A-share market
Matthews Asia has been awarded a Qualified Foreign Institutional Investor (QFII) license by the China Securities Regulatory Commission (CSRC) and a USD100 million quota from the Chinese State Administration of Foreign Exchange (SAFE).
The award of a QFII licence and quota enables the firm to invest, on behalf of its clients, up to USD100 million directly into China’s domestic securities market, including the market for China A-shares.
Currently, direct investments into this market by foreign investors can only be made with a QFII licence and quota.
The quota will be made available to funds managed by the company, including its US-domiciled open-ended equity mutual fund family, Matthews Asia Funds.
China’s A-share market is the fifth largest public equity market in the world. It consists of over 2,300 companies totalling approximately USD2.6 trillion in market capitalisation and offers investors the opportunity to invest directly into a growing market of companies that are benefiting from China’s economic transformation. The breadth and depth of the market also presents a much bigger pool of investment opportunities compared to Chinese companies listed on the H-share market in Hong Kong or the B-Share markets in Shanghai and Shenzhen.
The A-share market is considerable, but Matthews Asia believes that significant improvements in corporate governance standards are still required. The firm believes this supports the need to conduct extensive due diligence on prospective investments and highlights the value of taking a long-term active management approach.
Matthews Asia is a specialist investment manager located in San Francisco. With USD26.6 billion in assets under management, the firm focuses on long-term investing solely in Asia. It is the investment advisor for the Matthews Asia Funds, a range of 15 open-ended equity and fixed income mutual funds incorporated in the US.
William Hackett, chief executive officer, says: “As a specialist investment manager focused on Asia, the award of a QFII licence by the CSRC and quota by SAFE in China reflects our deep, long-term commitment to investing in the region. We believe having access to the full range of opportunities across equity markets in Asia is extremely important and the award now enables us to bring the potential benefits of exposure to China’s domestic equity market to investors in the US. We are pleased to be able to offer our shareholders access to this important market through our US-domiciled mutual fund family.”
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