First State Investments has launched its China A Shares Fund as investor demand grows for a Ucits product investing in the relatively untapped and underrepresented Chinese equity sector.
First State Stewart Asia will manage the Ireland-domiciled fund through a bottom up stock picking approach integrated with environmental, social and governance (ESG) issues. The fund will be managed from Hong Kong by portfolio manager Quanqiang Xian.
Xian said his team was focused on investing in companies with good governance and proven capabilities along with looking for evidence of increasing ESG standards and rising cash flows.
“We believe that such companies should provide satisfactory financial returns at lower volatilities for investors over the medium to long term,” he said.
First State Stewart Asia’s managing partner, Michael Stapleton said the launch reflected investor demand for a Ucits product with access to an equity market that was relatively untapped and underrepresented in investor portfolios.
“China A shares market is complex to navigate; we believe that our detailed company analysis through our active, bottom-up investment approach, together with our experience of investing in China, will provide European investors with a good way of accessing this developing market,” he said.