REVIEW | BlackRock launches China Flexible Equity Fund

Investments |6 days ago

BlackRock has expanded its range of Asian equity products by launching the flexible investment fund BlackRock Global Funds (BGF) China.

Expanding to onshore stocks

The fund is designed to enable an increasing number of investors to access investment opportunities on the Chinese equity market. This will give access to both onshore (A shares) and offshore equities (H-shares, Red-chips, P-chips, American Depositary Receipts [ADR], etc.) without the need to build two separate strategies. Funds investing in China often focus exclusively on offshore shares, while Chinese onshore stocks – or A shares – remain a considerable minority within the portfolios of global investors, due to historic restrictions on access to foreign investment.

BGF China Flexible Equity Fund is managed according to a flexible approach and invests between Chinese onshore A shares and offshore shares, on market capitalization and in different sectors. The fund captures investment opportunities by looking at all the nuances of the Chinese equity markets, including different market valuations, factors that work favorably across different market cycles or specific industry opportunities. The Fund is a long term, fundamentals oriented portfolio that invests in a range of 20 to 50 selected companies in a basket of over 3,300 onshore and 1,000 offshore securities.

“A rich investment universe”

The BGF China Flexible Equity Fund is managed by Helen Zhu, BlackRock’s Head of Chinese Equities, supported by a team of 10 analysts based in Hong Kong and Shanghai. Helen Zhu commented: “Chinese equities have been demonstrating higher sector return dispersions, offering active stock pickers a rich investment universe.

“Dynamic, vibrant and now more accessible than ever before, we believe Chinese equities offer investors an attractive opportunity to invest in the transformation of this huge country.

“The fund aims to blend the best opportunities, taking advantage of the nuances in the Chinese equity markets. Through flexible allocation, the fund can invest across the full range of market capitalization and Chinese stocks listed globally, whether they are listed in mainland China, Hong Kong, the US or elsewhere.”

Considering the shear size of the Chinese population coupled with a political environment slowly opening up to the world and a sustained growth of the country’s economy, onshore shares are definitely becoming a no-brainer for foreign investors. So this new fund will be well received by those looked to tap this new market.

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