CIMB-Principal Asset Management Berhad recently launched its maiden China-focused fund, CIMB-Principal China Direct Opportunities Fund under its Renminbi Qualified Foreign Institutional Investor (RQFII) licence.
CIMB-Principal is the first entity in Malaysia to be awarded this licence which allows it to invest directly in the China A-Shares market, giving it a strong advantage to strengthen its customer value proposition, while cementing its leadership position in the asset management industry, both in Malaysia and regionally.
The Fund is an equity growth fund that aims to provide capital appreciation over the medium to long-term and will invest a minimum of 70 per cent of its net asset value (NAV) in China A-Shares focusing mainly on small and mid-cap companies with good growth potential, while the remaining 30 per cent of its NAV will be invested in liquid assets.
The Fund is co-managed by CCB Principal Asset Management Co., Ltd., one of China’s fastest growing asset management companies – backed by China Construction Bank, US-based Principal Financial Group, and China Huadian Capital Holdings Company Limited – with USD207 billion of assets under management as at December 2017.
With direct access to the China A-Shares market, subscribers to the Fund have the opportunity to invest in the world’s second largest equity market, a direct proxy to an economy set to grow at 6.6 per cent in 2018.
China A-Shares are traded on the Shanghai and Shenzhen Stock Exchanges, with trades denominated in Renmimbi.
The inclusion of China A-Shares in the MSCI Emerging Markets Index in 2018 is also expected to attract more inflows into China’s equities market.
“We are excited to offer this fund, the first under our RQFII licence.
“There is no better time to participate in China’s new economy – comprising industries such as information technology, green technology, healthcare and consumer discretionary, which are set to propel China’s next growth trajectory.
“Through this fund, Malaysian investors will have direct access to a hitherto untapped universe of opportunities, previously accessible to only Chinese citizens,” said Munirah Khairuddin, chief executive officer of CIMB-Principal.
She added access to the China A-share market also supports CIMB-Principal’s growth and diversification strategy, which enhances our overall investment advisory capabilities.
“We are optimistic of the demand from Malaysian investors, and are confident of achieving our target fund size of USD100 million within the first year of the Fund’s inception.
“We truly believe that CCB Principal’s on-the-ground expertise in China, its solid track record in managing regional and global investments and CIMB Principal’s investment capabilities will form a strong synergy to ensure the optimum performance of not only this fund, but also future China-focused funds by CIMB-Principal,” added Munirah.
CIMB Bank Berhad has exclusive distributorship of the Fund via CIMB Bank branches nationwide for the first three months from the Fund’s inception.
Gary Yong, Regional Head of Wealth Management, CIMB Bank Berhad. Said the Fund is a strong addition to CIMB Bank’s suite of investment products, enabling us to cater to an even wider range of investor profiles.
“Asia’s future growth will continue to be underpinned by China, and her economy’s rapid but calculated embrace of new technology.
“There is no better time to be part of that growth story than now, when we are at the cusp of the Fourth Industrial Revolution,” he said.
China A-Shares make up the largest equity market in Asia, and is second only to the New York Stock Exchange in the world.
The benchmark for the Fund is Shanghai Shenzhen CSI 500 Index which encompasses some of the fastest growing small and medium companies with the potential to be global players.
The Fund offers units in three currency classes: RM, SGD and USD.
