French asset manager Amundi has rolled out an emerging market equity fund that invests in companies benefitting from China’s modern silk road.
The Amundi Funds New Silk Road aims to achieve long-term capital growth by seeking investment opportunities that will benefit from the “expected expansion in trade” and “associated economic growth” along the silk road, Yerlan Syzdykov, global head of emerging markets at Amundi, said.
As many Belt and Road Initiative (BRI) projects may not offer the most attractive investment opportunity, Syzdykov explained, “the Amundi Funds New Silk Road aims at investing in areas associated with the BRI project, rather than investing directly where the BRI invests”.
Weaving a path
Suitable stocks are primarily identified by the broader emerging market equities teams via themes. The teams allocate investments by integrating Amundi’s emerging market macro views and combine them with country, sector and style analysis, while navigating geo-political sensitivities along the silk road.
The portfolio of the EUR-denominated fund will hold about 60-90 companies.
Markets which are considered benefiting from the development of trade routes are Asia, Europe, Middle East and Africa.
The BRI will cover more than 65 countries, with €1trn of planned investments in 1,700 infrastructure projects, according to Amundi citing the World Bank.
The strategy team is led by Nicholas McConway, head of thematic and concentrated strategies, and co-managed by Giampaolo Isolani, head of investment solutions and market intelligence and Deirdre Maher, head of frontier markets for equity.
The team is part of the broader Amundi Emerging Markets Investment platform which manages about €45bn in dedicated emerging markets equity, fixed-income and cross-assets strategies, according to Amundi.
Another Amundi New Silk Road cross asset solutions fund has attracted more than €459m, it said.
Amundi manages in total €1.487trn in assets.
|Top 10 holdings of the Amundi Funds New Silk Road as of 22 October 2019|
|Company name||Weight% (PTF)||Sector||Country|
|TENCENT||5.31%||Interactive Media & Services||CHINA|
|SAMSUNG ELECTRONICS||3.66%||Technology Hardware, Storage & Peripherals||KOREA|
|ALIBABA||3.29%||E-Commerce, Internet, Retail||CHINA|
|TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY||3.04%||Semiconductors & Semiconductor Equipment||TAIWAN|
|NATIONAL BANK OF KUWAIT||2.86%||Banks||KUWAIT|
|CHINA GAS||1.94%||Gas Utilities||CHINA|
|GAZPROM||1.87%||Oil, Gas & Consumable Fuels||RUSSIA|
|KUWAIT FINANCE HOUSE||1.78%||Banks||KUWAIT|
|NASPERS||1.43%||Internet Company Investment||SOUTH AFRICA|