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recently, global investment institutions have successively issued chinese stock funds to buy the bottom of a-shares and are optimistic about the long-term investment value of chinese stocks.

british and american investment institutions jointly take action

recently, british asset management giant m&g investments announced the launch of a chinese stock fund, optimistic that china is "one of the most attractive long-term stock investment markets in the world." m&g said,the fund’s launch comes at a time when china’s stock market is at the bottom of its valuation range and many companies are increasingly focused on improving shareholder returns.

source: m&g official website

according to the m&g official website, the investment approach of the m&g china fund will be centered on about 300 chinese stocks, which have been screened through more than 30 years of rigorous coverage and investment research. the goal of the m&g china fund is to provide a higher total return (including capital appreciation and dividend income) than the msci china with 100% china a share index in any five years. the fund usually holds 50 to 80 stocks, focusing on high-quality companies with strong balance sheets, sustainable cash flows and attractive valuations.

the fund will be managed by david perrett, who has more than three decades of experience investing in china and across the region. he will be supported by singapore-based deputy fund manager jamie zhou and the entire asia pacific equity investment team, which manages approximately $23 billion in assets in the region.

the team also invests in asian and japanese equities on behalf of the £129 billion participating fund managed by m&g life insurance to further diversify its geographical allocation. in 2021, they received a mandate to invest in chinese equities, which has grown to $1.14 billion. the launch of the chinese equity fund is part of m&g's strategy to expand its investment capabilities and make it more widely available to external investors, especially to the uk wealth management sector, which is looking to increase its global investment allocation.

just at the end of august, new york-based kraneshares also announced the launch of the kraneshares china alpha index etf (abbreviated as "kcai") on the new york stock exchange.

according to the us-based jinrui fund,china a shares are undervalued in global indices, and allocation to china a shares may bring diversification benefits; china a shares have unique characteristics and are an important source of alpha returns.

the characteristics of kcai fund are: stocks are selected from the stock pool of csi 300 index, the position of a single stock in the etf will not exceed 5%, and the etf uses ai investment decision-making technology to rebalance once a month. the underlying index of kcai fund is qi china alpha index.

according to the official website of american golden mile asset management, as of september 11, the fund's top ten holdings were: innolight, fuyao glass, foxconn industrial internet, nanrui technology, changan automobile, cicc gold, agricultural bank of china, shandong gold, hua xia bank, and bank of china.

as of september 11, the top ten holdings of kcai fund source: us jinrui fund official website

foreign institutions: we can be more optimistic about the chinese market

the low valuation of the chinese stock market is attracting more attention from overseas funds. david perrett, m&g china fund manager and co-head of the asia-pacific equity investment team, said: "we believe that the market capitalization of the chinese stock market is currently disproportionate to the size of its economy, and the valuations of many stocks are extremely attractive. at the same time, many chinese companies have shown increasing operational resilience in recent difficult times and are increasingly focused on maximizing profits and improving shareholder returns by increasing dividends and stock buybacks."

"in addition to continuous internal optimization, many chinese companies are also at the forefront of global growth areas such as renewable energy and digital supply chain management," david perrett further stated.

from a macroeconomic perspective, alliancebernstein believes that china is likely to further promote loose policies in the future, and the loose cycle may continue for a long time. after the recent market correction, the federal reserve and the european central bank may cut interest rates ahead of schedule, and the rate cut may be greater than previously expected, but how long the loose cycles of the two will last is still unknown. in contrast, china has loose policies and mild inflation prospects, the continued promotion of rmb internationalization, and the growth highlights of china's dual-speed economy, which are worthy of investors' in-depth thinking and research.

therefore, some people believe that we can be more optimistic about the chinese market. zou jiangyu, manager of blackrock advanced manufacturing one-year holding hybrid fund, believes that the a-share market has undergone a relatively obvious adjustment in august, and the growth sector, especially technology-related stocks, has been hit hard. at the current point in time, as the disclosure of the interim reports of listed companies is gradually digested by the market, the overall valuation level of the market is also more attractive. at the same time, the economic and market protection policies are expected to be further introduced, so we should be more optimistic about the market.

looking ahead, zou jiangyu remains optimistic about companies in advanced manufacturing fields such as technology, automobiles, new energy, and high-end equipment materials. the trend of the artificial intelligence industry remains strong, and innovation in consumer electronics in the second half of the year is also worth looking forward to. china's global competitiveness in clean energy, automobiles and other fields is expected to be transformed into more demand and orders, and breakthroughs in high-end equipment and materials are also continuing to make progress.