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recently, british investment giant m&g announced the launch of the m&g china fund, saying that chinese stock valuations have reached historical lows.

it is understood that the fund will be managed by david perrett, who is also the co-head of m&g's asia pacific equity investment team and has more than 30 years of investment experience in china and the wider region. in addition, the fund will also receive support from the company's asia pacific equity investment team. the team currently manages us$23 billion in assets. the team pays great attention to risk pricing, and its highly confident, bottom-up stock selection approach will leverage its extensive knowledge and network of companies and contacts in the region.

the company believes that the reason for establishing the china fund is to provide investors with access to one of the world's most compelling long-term stock picking markets. the launch coincides with the historically low valuation of chinese stocks and the increasing focus of companies on improving shareholder returns.

in terms of investment strategy, the m&g china fund's stock pool consists of approximately 300 chinese stocks, and will focus on high-quality companies with strong balance sheets, sustainable cash flows and attractive valuations.

the objective 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 over any five-year period.

"in our view, the market capitalization of china's stock market is currently disproportionate to the size of its economy, with many stocks trading at low valuations. at the same time, many chinese companies have demonstrated increasing operational resilience during recent difficult times and are increasingly focused on maximizing profits and improving shareholder returns through higher dividends and share buybacks," perret said.

perret also said: "in addition to continuing to increase their own value, many chinese companies are leaders in global growth areas such as renewable energy and digital supply chain management. we believe that our bottom-up stock selection approach, combined with strict risk management, should enable us to provide investors with consistent and attractive returns."

as a representative of m&g life, which has an investment scale of up to £129 billion, the team mainly invests in asian and japanese stocks, while seeking to further diversify its geographical allocation. in 2021, the team obtained the authorization to invest in chinese stocks and currently has $1.14 billion in assets invested in china. the launch of the china fund is part of m&g's strategy to make its investment capabilities more widely accessible to external investors, with a focus on the uk wealth management industry as they seek to increase their global allocation.

fabiana fedeli, cio of equities, multi-asset and sustainability at m&g investments, also said: "active management is essential for investors who want to capture china's long-term growth potential while avoiding market pitfalls and volatility. we are delighted to launch the m&g china fund and provide this opportunity to our investors."