The three new Sicav structured funds offer unprecedented access to local markets in China.
The launches follow the award of Ashmore’s Renminbi Qualified Foreign Institutional Investors (RQFII) status by the China Securities Regulatory Commission (CSRC) in January this year. Ashmore was the first manager outside of Greater China to be awarded this status.
“China is not only the world’s second largest economy, it is also one of the most difficult to access, with local markets having been largely inaccessible to foreign investors. The launch of these funds changes this dramatically,” said Christoph Hofmann, Ashmore's global head of distribution.
The Ashmore Chinese Debt Fund seeks to access returns available from a strategy of Chinese debt securities issued by Sovereigns, Quasi Sovereigns and public and private sector Corporates denominated in RMB and traded on the China Interbank Bond market and or the China exchange traded bond market
Ashmore Chinese Equity Fund invests in Chinese A-shares listed on the Shanghai and on the Shenzhen stock exchanges and the Ashmore Chinese Multi-Strategy Fund generates returns from a balanced strategy of the equity and debt strategies.
China is in the midst of a storming change as it transforms itself from an export to a domestic-led economy.
“We believe China's aggressive appetite for reform and forward-looking policies will place the country in a very strong position to grow in the future,” said Jan Dehn, head of research.
“The transformation of the Chinese economy will be especially positive for the domestic bond market which will play a central role macroeconomic policy.”
Local Chinese equities have been hit by poor investor sentiment amidst slower growth but Dehn believes this has created a buying opportunity. Valuations are depressed, Chinese indices remain around 75% lower on a price-to-earnings basis compared to pre-crisis peaks and P/BV multiples are at near decade lows.
“This is despite a strong expected earnings recovery and the country’s strong fiscal position which means there’s huge firepower to stimulate growth if necessary,” said Dehn.
Northern Trust provide all aspects of fund administration in Luxembourg and HSBC will act as the onshore sub custodian.