Schroder China Asset Income Fund

Coast through China's investment highway of multi-asset opportunities

Why Invest in the Schroder China Asset Income Fund?

Capitalise on the post-coronavirus growth opportunities in China

The dynamic, fast-changing equity market in China offers investors ample unique investment opportunities to capture the growth potential of existing investment trends and those that have emerged after the Covid-19 outbreak.

For example, China is already one of the markets with the fastest-growing online retail penetration.The acceleration and evolution of the country’s e-commerce ecosystem in the post Covid-19 era are set to prompt more investment ideas. The re-organisation of supply chains, amid rising geopolitical risks,the disruption from the virus outbreak and the growing importance of self-sufficiency for many of the industries in China, is also bringing forth a lot of new opportunities, such as production automation, robotics and semiconductors, to name but a few.

Our dynamic focus helps us identify these evolving trends early on and capitalise on these growth opportunities across different industries and sectors in China.

Attractive yields from the China bond market

Apart from equities, the country’s fixed income market also offers growth potential. The Chinese onshore bond market is the world’s second largest by market value, while the offshore Chinese US Dollar corporate bond market is also the largest within the Asian universe, providing a lot of interesting opportunities for income-seeking investors.

The China bond market provides a diverse universe of income opportunities, both onshore and offshore. The inclusion of the onshore bond market in major global bond indices will likely fuel investors’ interest in the market going forward.

Comparison graph of bond yields for major markets in Dec 2022

Source: Bloomberg, as of 30/06/2023

China High Yield (HY): ICE BofA Asian Dollar High Yield Corporate China Issuers Index; Asia HY: ICE BofA Asian Dollar High Yield Corporate Index; US HY: ICE BofA US High Yield Index; Europe HY: ICE BofA Euro High Yield Index

China Investment Grade (IG): ICE BofA Asian Dollar Investment Grade Corporate China Issuers Index; Asia IG: ICE BofA Asian Dollar IG Corporate Index; US IG: ICE BofA US Corporate Index; Europe IG: ICE BofA Euro Corporate Index

Active asset allocation with risk management

The fund’s active asset allocation between Chinese equities (30-70%), Chinese bonds (30-70%), other asset classes (0-20%) and Cash (0-30%)~ aims to capture growth and income opportunities in China. We will also actively manage the exposures to onshore equities and fixed income to take advantage of the growth potential of onshore assets. In addition, risk management on currency and interest rates is implemented from time to time with the aim to reduce potential losses during difficult markets.

Active asset allocation aims to enhance overall performance

Source: Schroders.

~The exact asset allocation may deviate from the range mentioned above without prior notice to investors, please refer to the relevant offering document for details.

Regular monthly payout

(Distribution rate is not guaranteed, and payment of distributions could be paid out from capital)^

With zero or even negative interest rates, income on assets will continue to be one of the important components of investors’ returns. The fund offers investors a regular monthly payout, backed by a sustainable stream of income mainly from the fixed income portfolio, and to a lesser extent from the equities in the fund.

^In respect of the distribution units, the manager will declare and pay monthly distributions. However, the distribution rate is not guaranteed. Distribution yield is not indicative of the return of the fund. Distributions may be paid from capital of the fund. Investors should note that where the payment of distributions are paid out of capital, this represents and amounts to a return or withdrawal of part of the amount you originally invested or capital gains attributable to that and may result in an immediate decrease in the value of units.

Recognition for investment expertise

Fund Selector Asia Awards Hong Kong 2023 Multi-Asset House of the Year

Fund Selector Asia Awards Hong Kong 2023 - Multi-Asset House of the Year*

Related documents

Slide 1 of 2
Fund Brochure
Fund factsheet

Schroder China Asset Income Fund

You can find more information on the fund including literature and performance data on our fund centre.

*The result of Fund Selector Asia Fund Awards Hong Kong 2023 is based on the performance of the Multi-Asset investment team as of 5 Nov 2021 – 4 Nov 2022.