HSBC Global Asset Management has launched the HGIF China A fund in response to client demand, offering investors access to the China A-shares market.
The actively managed equity fund will aim to generate long-term alpha by investing in high-quality companies with sustainable business models at "attractive" valuations.
A sub-fund of the Luxemburg-domiciled HSBC Global Investment Funds (HGIF), HSBC's global flagship fund range, the fund will be a high-conviction portfolio of 40 to 80 stocks with a large-cap bias.
China's onshore equities have a market capitalisation of $7.8trn and more than 3,500 listed companies, many of which offer unique investment opportunities."
It will be co-managed byHSBCGlobal AM's Jintrust team - the joint venture betweenHSBCGlobal AM and Shanxi Trust - in Shanghai and the offshore team in Hong Kong.
Mandy Chan, head of China and HK equities and the lead manager of the HGIF China A fund, commented: "China's onshore equities have a market capitalisation of $7.8trn and more than 3,500 listed companies, many of which offer unique investment opportunities that can't be accessed elsewhere.
"The depth and breadth of the onshore equity market as well as the increased allocation in key benchmarks have made the asset class impossible for overseas investors to ignore.
"The HGIF China A fund offers global investors the opportunity to gain exposure to China's economic transformation and some of the most exciting structural stories in the 'new China' sectors, such as healthcare, consumer products and technology.
"Bolstered by supportive government policies, these companies have achieved better growth than the overall market in recent years, beating out 'old economy' rivals."
HSBCGlobal AM has managed Chinese assets since 1992 and currently manages $5.7bn in onshore and offshore Chinese equities as of June 2019.
This article was first published by Investment Week, a sister title to International Investment.