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CIFM Hong Kong launches RMB China A Focus Fund
CIFM Asset Management (Hong Kong), a subsidiary of China International Fund Management Co. (CIFM), has launched its new Renminbi Qualified Foreign Institutional Investor (RQFII) fund product – CIFM (HK) RMB China A Focus Fund.
The Asset 26 Jan 2015
CIFM Asset Management (Hong Kong), a subsidiary of China International Fund Management Co. (CIFM), has launched its new Renminbi Qualified Foreign Institutional Investor (RQFII) fund product – CIFM (HK) RMB China A Focus Fund.
 
By leveraging on its concentrated strategy, the Fund aims to capture the investment opportunities brought on by China’s economic structural shift to generate a greater incentive for better performance.
 
CIFM (HK) RMB China A Focus Fund adopts an active management strategy and will invest not less than 70% of its portfolio in China A-shares which are denominated and settled in renminbi. The remaining 30% may be invested in equities of China-related companies, debt securities, fixed income fund, options, index futures, etc.
 
The Fund distinguishes itself by its concentrated strategy with the top 30 stock holdings forming not less than 70% of its portfolio. It also focuses on the A-share market for a greater potential return. The subscription of the Fund starts from  January 26 until  February 11 with a minimum subscription amount of 10,000 renminbi or HK$12,000.
 
Anthony Ho, chief executive officer of CIFM (HK), said, “CIFM has a solid investment and research platform and a bottom up stock selection process with its core focus on growth stocks to deliver the best results to investors. Going forward, we will continue to strengthen our investment on renminbi business, introduce more products to fulfill market needs and further diversify our product line. We are currently preparing for the mutual recognition scheme for fund products in mainland China and Hong Kong. We expect the scheme would help attract overseas clients and extend our distribution network to overseas markets, which will ultimately speed up the internationalization process of CIFM while upholding the principle of ‘clients’ interests come first’.”
 
The launch of the Shanghai-Hong Kong Stock Connect programme has recently reactivated the long-quiet A-share market in China. Being foreign investors’ focal point, the A-share market attracts foreign inflow but stock valuations remain low despite the drastic climb-up of the A-share market last year. CIFM (HK) is positive on the long-term development of the China market and believes that China’s economic reform, domestic investors’ increase in asset allocation to the stock market and the possible roll-out of the Shenzhen-Hong Kong Stock Connect scheme within the year will help boost the growth of China’s A-share market.
 
Judy Chang, chief investment officer of CIFM (HK), said, “The trend has been set for a bullish A-share market in 2015 as China is actively implementing its fiscal policy and a stable monetary policy, coupled with the structural reforms of its state-owned enterprises, financial and land systems, etc. We anticipate that China’s economy will slow down steadily in 2015 but its GDP growth will remain above 7%. The implementation of economic policies will lead to a lower cost of capital. The various reforms will be implemented at different levels this year under the guiding principles of last year."
 
"Also, it is expected that the A-share market will be opened up to international investors. In view of all these factors, we expect the A-share market to go up in 2015. Nevertheless, investors have to be cautious of market volatility taking into consideration that the A-share market recorded an increase of over 50% last year, the current balance of margin finance remains high, ETF options will start trading on 9 February and the Stock Registration System may roll out in the second half of the year. These factors will increase market volatility. Having said that, China’s economy will experience a structural adjustment in the coming years and a new generation of leaders will step up their efforts in carrying out reforms and opening up the market. Investment opportunities will arise under the new economic structure in the future,” Chang says.
 

CIFM (HK) is positive on the outlook of the A-share market in 2015 and will focus its asset allocation on stocks with thematic growth opportunities and large-cap blue chips. The Fund does not focus on any particular sector or industry but aims to achieve long-term capital appreciation by investing in companies with long-term growth potential that benefit from the economic restructuring of China. Industries that are of interest include branded consumption, electronics, pharmaceutical, sports and education, military, telecommunications, environmental protection, renewable energy, among others.    

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