China AM’s Ping An targets global investors
Ping An of China Asset Management in Hong Kong has launched its first UCITs umbrella fund in an attempt to attract global investment.
Last week, China Asset Management’s offshore, Hong Kong-listed investment platform, Ping An, has launched its first UCITs umbrella fund, in a move to target global investors. The umbrella fund is made up of four sub-funds, three of which will be used for specifically investing in Chinese assets.
“This new UCITs vehicle provides global investors [with] the opportunity to invest in China’s equity and fixed income markets. We look forward to launching more products and services that meet global investor demands," said Hoi Tung, Chairman and Chief Executive of Ping An Overseas Holdings
According to a Ping An spokesperson, the firm already has relations with distribution partners across Europe, and they’re already preparing to apply Hong Kong’s Securities and Futures Commission in order to distribute the products to retail investors. Currently, in Hong Kong, the firm already manages six ETFs and a single unit trust fund that is domiciled in the territory.
Ping An’s sub-funds focus on a Chinese equity fund, two Chinese fixed income products, and one that takes aim at emerging market bonds. Here’s a breakdown:
China A-Shares AI Multi-Factor Fund
The China A-Shares AI Multi-Factor fund will be used to create diverse equity portfolios; through the implementation of advanced artificial intelligence (AI) techniques, Ping An’s systems will have enhanced stock selection and portfolio optimisation capabilities. The system “aims to achieve stable excess returns above the benchmark China Securities Index (CSE) 300 Total Return Index.”
China Green Bond Fund
The China Green Bond Sub-Fund is focused wholly on China’s emerging ‘green’ markets, which have been created to align the People’s Republic with the rest of the world when it comes to international standards for promoting green financing. The fund will also be used to advance environmentally-friendly investments and increase social awareness in China and other emerging Asian countries. “Bolstered by strong domestic economic recovery and policy support, China green bonds not only help investors capture China’s green opportunities, but also mitigate risk due to its low correlations to other major asset classes.”
China High-Yield Private Strategy Bond Fund
China’s High-Yield Private Strategy Bond Sub-Fund will focus on investing in high yield corporate bonds to guarantee investors an “absolute” return on investment from investment income and long-term capital appreciation. The Fund may also look at investing in debt securities “issued by sovereign, government agencies and/or companies having main operations in mainland China.”
Emerging Market Income Fund
Much like the High-Yield Private Strategy, the Emerging Market Income Sub-Fund has ambitions to provide “absolute” return on investment from income and long-term capital appreciation. They will achieve this by investing “at least 60% of its net assets in debt securities issued by sovereign, government agencies and/or companies having main operations in emerging market countries.”
“Capitalising on the geographic advantage of Hong Kong, PAAMC HK connects China with the rest of the world. We are committed to helping our onshore Chinese clients to invest globally and our global clients to invest in China. Currently, we are seeing strong growth in demand for Chinese assets, as China can provide both pickup in yields and portfolio diversification.
"We are very excited to broaden our offering to include our first UCITS fund, which provides our global clients access to opportunities to invest in China,” added Chi Kit Chai, Head of Capital Markets and Chief Investment Officer, Ping An of China Asset Management (Hong Kong).
Aviva Investors launch $350m global climate credit fund
Aviva Investors has launched a climate transition global credit fund and has already allocated US$350m in strategic capital.
The funding, which has been provided by Aviva’s UK and Irish multi-asset funds, will be used to invest in companies offering goods and services that support climate change mitigation and the move towards a more sustainable future.
According to reports, the fund is in line with Aviva’s ESG philosophy on green policies and the United Nations sustainable development goals. It will be handled by portfolio managers Justine Vroman and Tom Chinery, as well as the noted climate specialist, Rick Stathers.
Aviva sustainable investment strategy
Companies excluded from the investment fund will be those entrenched in the fossil fuel industry, while enterprises that look at solutions to climate-related problems, such as sustainable transport, renewable energy and environmentally conscious lending, will be targeted.
Aviva Investors confirmed the goal is to capture transition-oriented companies with low decarbonisation and physical impact risk.
The initiative will also be benchmarked against the Bloomberg Barclays Global Aggregate Corporates Index, investing predominately in investment-grade companies and a small allocation of up to 5% in high-yield bonds.
Colin Purdie, Aviva Investors chief investment officer for credit, explained, "We can't pivot to a lower-carbon world if all we do is rule out the poor performers and only invest in companies that provide solutions to climate change. All companies need to adjust for a warmer, lower carbon world, which is why we felt it was important to use a wider transition lens to capture a larger set of businesses beyond those with obvious green credentials."
He said, "As investors, it is our responsibility to look beyond small pockets of green finance to engage and mobilise the liquidity of the wider credit market to assist in climate transition and the achievement of net zero carbon emissions."
Purdie added, "Companies that don't adjust their business models will be less attractive to investors and will present a less compelling investment case over time. Climate laggards may find that their financing becomes more expensive than that available to climate leaders."