2018 seems to be the year of the China bulls as several industry players, including Allianz GI, Citi Private Bank and HSBC Private Bank in January have already asserted optimism for China equities. Global firms are also setting up onshore structures to launch onshore funds. The data is supportive. In fact, in 2017 FSA found that nine of the top ten best performing funds in 2017 were China equity funds.
Aberdeen Standard is joining the parade of bulls. In January, it was granted an additional RMB 5.3bn ($840m) in RQFII quota and now has a total of RMB 12.6bn ($2bn). It was the only firm that received RQFII quota in January. No new or additional QFII quotas were given during the period.
China’s qualified foreign institutional investor scheme (QFII) and its renminbi equivalent (RQFII) allow foreign institutional investors to invest in onshore Chinese assets, within allocated quotas.
Besides Aberdeen Standard’s RQFII quota, the firm also has QFII quotas of $77m, according to SAFE records.
Firms usually apply for additional quota when their previous quota has been fully utilised. FSA sought more information from Aberdeen Standard, but the firm declined to comment.
Before its merger with Standard Life Investments, Aberdeen was an RQFII licence holder (since 2014) and a QFII licence holder, according to records from the China Securities Regulatory Commission (CSRC).
In Hong Kong, the firm has a China-focused equity fund, the Chinese Equity Fund, which has $735.7m in assets invested in both onshore and offshore markets, according to its fund factsheet.
It also has regional funds that invest in the onshore market, such as the Asia Pacific Equity Fund and the Asian Local Currency Short Duration Bond Fund, according to the fund factsheets.
Biggest RQFII holders
With the additional quota, Aberdeen Standard is now one of the top 10 biggest RQFII quota holders, with Hong Kong’s CSOP Asset Management at the top of the list, according to data from SAFE.
Top 10 biggest RQFII quota holders
| Fund manager |
Country |
RQFII quota (RMB bn) |
| CSOP Asset Management |
Hong Kong |
46.1 |
| Vanguard Investment Australia |
Australia |
30 |
| E Fund Management (HK) |
Hong Kong |
27.2 |
| China Asset Management |
Hong Kong |
21.8 |
| Blackrock (Singapore) |
Singapore |
20 |
| Blackrock Asset Management North Asia |
Hong Kong |
17 |
| Harvest Global Investment |
Hong Kong |
14.74 |
| Aberdeen Asset Management Asia |
Singapore |
12.6 |
| Blackrock Fund Advisors |
US |
11 |
| Haitong International Holdings |
Hong Kong |
10.7 |
Source: SAFE
However, if Blackrock were to combine the RQFII quota from its different entities in Hong Kong, Singapore, the US and the UK, it would be the largest RQFII quota holder with RMB 54.1bn.
Since the quota programmes began, SAFE has awarded a total of RMB 610.36bn in RQFII quota to 196 licence holders and $97.16bn in QFII quota to 288 licence holders, according to SAFE data.
In total there are 226 RQFII and 310 QFII licence holders, according to CSRC data.
