Eleanor Wan, BEA Union Investment
The fund is an unconstrained Asian fixed-income strategy that invests in corporate, government, high yield and investment grade bonds. It is the firm’s first fund to be distributed under the MRF scheme.
The ABC fund is one of the firm’s flagship funds. It is also distributed to Swiss investors under the Hong Kong-Switzerland MRF scheme.
The firm has also submitted an application to include its Asia Pacific Multi Income Fund under the China-Hong Kong MRF scheme, according to Eleanor Wan, the firm’s CEO. “We are looking forward to receive the approval soon,” she told FSA.
It has been a while since a fund got approved for northbound sales under the MRF. The last was Amundi’s New Generation Asia Pacific Equity Dividend Fund, which received the green light to be sold in the mainland in June.
At the time, seven other funds had been allowed to be sold onshore, including two from JP Morgan Asset Management and one each from Schroders, Hang Seng Investments, BOCHK Asset Management, CCB International and Zeal Asset Management.
In contrast, there are around two dozen China-domiciled funds that have been approved for southbound sales, SFC data shows.
However, inflows into the northbound funds have been larger than into the southbound funds. Since January 2016, the net sales for northbound funds reached RMB 10.69bn ($1.64bn) at the end of November, while southbound net sales amounted to only RMB 275.52m, according to data from China’s State Administration of Foreign Exchange.
MRF monthly net sales (million RMB)
| Northbound | Southbound | |
| January | -286.1 | -2.4 |
| February | -181.6 | 3.6 |
| March | -10.2 | 4.7 |
| April | 67.4 | 8.8 |
| May | 1,140.8 | 42.6 |
| June | 928.7 | 17.7 |
| July | 313.7 | 61.5 |
| August | 948.1 | 42.9 |
| September | 1,504.4 | 12.3 |
| October | 289.0 | 52.0 |
| November | 383.9 | 6.1 |
| Total net sales since Jan 2016 | 12,870.8 | 345.9 |
Source: SAFE
Online distribution
The mainland agent for BEA Union’s ABC fund, responsible for the coordination of northbound sales will be Tianhong Asset Management, according to the statement.
Wan said that BEA Union hopes to leverage Tianhong AM’s several online platforms and its extensive subscriber base to distribute the ABC Fund.
Tianhong AM is China’s biggest fund management firm that manages Yuebao, the world’s largest money-market fund, which is distributed via Alibaba’s online payment platform Alipay.
Tianhong AM has 375 million subscribers and manages RMB 2trn in assets, Rex Lo, BEA Union Investment’s managing director for business development, said in the statement.
“With its extensive expertise in online financial services, we believe Tianhong Asset Management will strengthen our development in China,” Lo said.
The firm has been working closely with Tianhong AM to develop the operations and marketing strategy for northbound sales. Without giving a timeline, the firm expects to launch the fund in China soon.
BEA Union Investment is also pursuing other channels to enter investment management business in China. It has established an investment management wholly foreign owned enterprise (IM WFOE), locating it in Shenzhen, unlike most other foreign peers whose IM WFOEs are based in Shanghai.
The firm is currently applying for a private fund management licence from the Asset Management Association of China, according to Wan. “Once approved, we will be able to conduct private fund business in China.”
The three-year performance of the BEA Union Investment ABC Fund versus its sector. The fund does not have a benchmark index.
