Invesco launches two China A-Share equity funds
Invesco has launched two new funds: Invesco China A-Share Quality Core Equity Fund and Invesco China A-Share Quant Equity Fund. Both are UCITS-compliant SICAVs which will be available to institutional and retail investors in the UK and a number of authorised countries across Europe.
Invesco China A-Share Quality Core Equity Fund aims to deliver long-term capital growth by investing in the A-Shares of Chinese companies listed on the Shanghai and Shenzhen stock exchanges. It will focus on attractively-valued companies with sustainable growth potential, underpinned by strong business models and sound balance sheets. Under the management of Chris Liu (Invesco Hong Kong Limited) based in Hong Kong, it will adopt a high-conviction, bottom-up approach: its portfolio will typically consist of 30-40 stocks.
Invesco China A-Share Quant Equity Fund will employ a quantitative, multi-factor investment approach. It aims to achieve long-term capital growth. It will invest in the A-Shares of Chinese companies listed on the Shanghai and Shenzhen stock exchanges, and will be managed by Alex Tavernaro based in Frankfurt alongside Andrew Tong based in Hong Kong (Invesco Quantitative Strategies).
In 2019, MSCI increased the weight of China A-Shares in its indices by increasing the inclusion factor from 5 per cent to 20 per cent. This comprises 253 Large and 168 Mid Cap China A-Shares, including 27 ChiNext shares, on a pro forma basis in the MSCI Emerging Markets Index, representing a weight of 3.3 per cent in the pro forma index.
Invesco has a strong presence in China, with a breadth of operations and capabilities covering both public and private markets. In 2003, it launched the pioneering Invesco Great Wall Management Company Ltd (IGW), the first Sino-American Joint Venture Fund Management Company in China, which now manages USD41.3 billion in assets across equities and fixed income. Invesco manages USD81.7 billion in Chinese assets. For the two aforementioned funds Invesco Great Wall Management Company Limited may support the investment manager to provide a non binding sub-advisory service.
“We’ve launched two A-Share funds, each with a distinct investment style to accommodate different investment needs," says Chin Ping Chia, Head of China A Investments, Business Strategy and Development at Invesco. ”We believe the China A-share market is one of the largest and most exciting investment universes that is opening up to global investors. However, because the market remains relatively young with areas of inefficiency, we believe an active approach will allow us to capture these opportunities.”
Andrew Lo, Head of Asia Pacific at Invesco, says: “Invesco has been managing capabilities in China for over 27 years and has deep, on the ground expertise. As China begins to open up to other markets internationally, we foresee rising interest from global investors to access China in A-Shares, which makes the need for dedicated products greater than ever. We are now able to bring our expertise of running onshore China A strategies to the market through two complementary UCITS funds, which can offer greater diversification and wider investment opportunities to our clients.”