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.
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.
Source: Bloomberg, as of 28/02/2022
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): JACI China Investment Grade Index; Asia IG: ICE BofA Asian Dollar IG Corporate Index; US IG: ICE BofA US Corporate Index; Europe IG: ICE BofA Euro Corporate Index
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.
~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.
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.
The Fund is managed by Schroders’ three top-class investment teams, namely the Multi-Asset team, the Asian equity team, and the Asian fixed income team. Their joint expertise is underlined by the award won by the fund at Fund Selector Asia Fund Awards Hong Kong. These teams will continue to proactively help investors capture capital gain and income opportunities in China markets.
Fund Selector Asia Fund Awards Hong Kong 2021
Gold - Mixed Asset1
Our business is structured around a number of strategic capabilities, which combine to meet a variety of client requirements. Please visit the Strategic Capabilities - Multi-Asset Solutions page to discover how we deliver outcomes to suit a variety of investment goals.
^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.
1 The result of Fund Selector Asia Fund Awards Hong Kong 2021 all funds are based on the performance of the fund. Fund Selector Asia Fund Awards Hong Kong 2021 (performance as of 1 July 2017 – 30 June 2020).