The fund has the ability to invest across the Chinese H-share, A-share and ADR markets and aims to buy stocks that are, according to Ashmore: “trading at a discount to intrinsic value in the context of quality and growth.
The emerging market specialist said it has seen continued growth in investor demand for dedicated China exposure in recent years as well as further allocations to China as part of broader emerging market holdings. And, it expects this demand to only continue to grow, especially with as China A-Shares are expected to form a growing part of the MSCI EM index in the coming years.
And, it said, it was of the belief that a fund that can access all areas of the market as the best way for investors to gain access to the Chinese market.
A Luxembourg-domiciled UCITS SICAV, the fund will seek to identify companies with sustainable earnings growth, with the possibility of structural improvement through research and development and reform. Ashmore also identified strong execution skills on the part of company management and attention to minority shareholders as key requirements for investment.
Christoph Hofmann, global head of distribution at Ashmore added: “China is the largest EM economy and the second largest in the world and is undertaking a dramatic reform agenda that will see its next phase of growth driven by domestic demand. The breadth and depth of its markets offers extraordinary access to companies that can benefit from this exciting, long-term investment story”.
