UOBAM Malaysia launches fund to access China growth
Fund to focus on A-share firms riding on tech and innovation trends
14 Jan 2021 | The Asset

UOB Asset Management (Malaysia) on Thursday (January 14) launched a fund aimed at providing retail investors with access to China-listed companies set to become the growth drivers of China’s economy.

The United Great Dragon Fund invests primarily in UOB Asset Management’s United China A-Shares Innovation Fund (target fund), which focuses on companies in the A-share market that are likely to be major beneficiaries of technology, innovation and long-term growth trends such as rising consumer affluence and growing urbanization.

The fund aims to achieve long-term capital appreciation by investing a minimum of 90% of its net asset value in the target fund and the balance in liquid assets such as money market instruments and deposits.

Lim Suet Ling, chief executive officer of UOBAM (Malaysia), comments: “As China is poised for a new growth phase, the China A-shares weightage in emerging and global indices such as the Morgan Stanley Capital Index (MSCI) will likely increase significantly over the next five to seven years. We estimate another US$300 billion to US$400 billion of inflows into China A-shares if MSCI’s inclusion ratio for these shares is increased to 100% from the current 20%.

“The increase in the inclusion ratio will see the free float of China A-shares owned by foreign institutional investors grow to 17% from the current 3.5%. This will give Malaysia’s retail investors access to new growth opportunities otherwise only available for institutional investors.”

The United Great Dragon Fund is available in Malaysian ringgit, Chinese renminbi and US dollar with an initial minimum investment of 1,000 ringgit, 1,000 yuan and US$1,000 respectively. UOBAM (Malaysia) is the fund’s manager, while, UOB Asset Management and Ping An Fund Management are the management company and sub-manager of the target fund respectively. The fund is available for subscription at selected distributors nationwide.