Hong Kong’s first Greater Bay Area thematic fund takes off
Designed to compete with bay areas in San Francisco, New York and Tokyo, the GBA is already attracting an influx of high-income professionals and investors.
Manulife Asset Management has launched the Manulife Greater Bay Area Growth & Income Fund (the Fund), the first of its kind in Hong Kong that aims to achieve capital growth and stable income generation by investing in equities and bonds of companies that could benefit from the rising economic importance of China's Greater Bay Area (GBA).
Ronald Chan, chief investment officer, equities, Asia (ex-Japan), Manulife Asset Management, says: "The Greater Bay Area is only 1% of China's total land mass, but accounts for about 12% of China's GDP2. Further development of the area is highly endorsed by the Central Government, as it plays a significant role in the 'Made in China 2025' initiative. The GBA is expected to rival established bay areas around the world in the years to come. Companies that stand to benefit the most are those based in the GBA and whose businesses are aligned with China's strategic direction – be those in sectors of core development focus or contribute to the hard- and software expansion of the GBA, all of which could potentially provide long-term returns to investors."
The Greater Bay Area includes: Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Zhaoqing, Huizhou, Jiangmen, Hong Kong, and Macau.
The Fund aims to provide investors with a monthly fixed dividend by focusing on dividend-yielding equities in the A-share, H-share, ADR markets and on- and offshore bonds spread across different sectors under four GBA strategic investment themes: science and technology, finance, consumption, and infrastructure.
Some observers believe science and technology is a significant growth engine in the GBA eco-system. The area is already the components production base for many of the world's tech companies, and an incubator for new enterprises and start-ups. This has a knock-on effect for the region's financial firms as demand for financing and related financial services grow. The financial industry would also need innovative technology to better facilitate their business. This means R&D investments will continued to be made into these sectors, further boosting their growth.
The GBA is already attracting an influx of educated, high income professionals, who demand for higher standard of living and consumption of goods. Economists anticipate this trend will accelerate the construction of education, healthcare, and entertainment facilities, and further attract talents to provide such services.
The expansion of the labour force necessitates increased demand for real estate and enhanced connectivity and mobility, which subsequently would lead to further investments into property, infrastructure, and transportation projects.
The Fund currently invests in equities from real estate, financials, information technology, consumer discretionary, and industrials sectors, while bond holdings are from the government, financial, consumer discretionary, energy, and materials sectors.
13 Sep 2018