Amundi has launched an equity fund targeting the "New Silk Road" theme, which has been designed to tap the opportunities in markets benefiting from the development of new trade routes across Asia, Europe, Middle East and Africa.
The Amundi Funds New Silk Road invests in the equity of companies that derive substantial revenues in markets and/or have significant business that benefit from the development of the new silk roads.
Nicholas McConway, head of Thematic & Concentrated Strategies, leads the New Silk Road strategy team while the new fund is co-managed by Giampaolo Isolani, head of Investment Solution & Market Intelligence and Deirdre Maher, head of Frontier Markets - Equity. In addition, the three portfolio managers benefit from the support, analysis and idea generation from the many other specialists within the 28 people strong Emerging Markets Equities team, which is part of the broader Amundi Emerging Markets Investment platform.
China's proposal for the Belt and Road Initiative (BRI) in 2013, inspired by the ancient Silk Road, has acted as a catalyst for new trade routes and growth across the regions, the French group said.
This new eco-system will cover more than 65 countries, with €1 trillion of planned investments in 1,700 infrastructure projects.
It follows the group's launch of the New Silk Road cross asset solutions, which have attracted more than €459 million since April this year.
The new strategy will not focus just on investments that could benefit from first order effects from China's BRI, it also seeks to benefit from second and third order effects of the BRI and similar initiatives aimed at growing trade along the New Silk Roads.
The Fund's investment process is designed to navigate geo-political sensitivities along the New Silk road, integrating top down analysis with stock picking. Ideas that fit the theme are primarily sourced from the broader Emerging Market Equities teams, underpinned by thorough fundamental research. Once suitable stocks have been identified, the integration of Amundi's Emerging Market macro views combined with further country, sector and style analysis drive allocations.
The objective is to have a high-conviction portfolio of 60 to 90 names, the French asset manager said in a note. Ideas fitting the theme are sourced from the broader emerging markets equity team, which manages €45 billion in assets.
Yerlan Syzdykov, global head of Emerging Markets said: "The Amundi Funds New Silk road aims at investing in the areas associated with the BRI project, rather than investing directly where the BRI invests.
"We have observed that many BRI projects with potential primary effects may not offer the most attractive investment opportunity. Hence, we are willing to look beyond China and infrastructure to seek out investment opportunities that we believe will benefit from the expected expansion in trade and associated economic growth along the new Silk Roads."