The Blackrock China New Horizon Mixed Securities Investment Fund is Blackrock’s first mutual fund in China offered to retail investors and is also the country’s first run by a foreign fund management company (FMC). The regulator posted its decision on its website late on Friday.
“The fund takes an investment approach that considers global macro views and the evolution of economies, and focuses on five growth sectors, including new energy, mass consumption, digital transformation, retirement, and industrial innovation and upgrade,” Alex Tang, portfolio manager of the fund, told FSA.
The product is a “mixed securities” product, according to Tang, although its sector focus has not yet been announced. “The fund will seek long-term capital appreciation via a total returns strategy that takes a long-term investing approach, backed by in-depth research into individual stocks and stringent risk management controls.”
It will be distributed from 30 August by Blackrock’s wealth management joint venture partner China Construction Bank (CCB), as well as Bank of Communications, Ping An Bank, CITIC Securities, Orient Securities, Huatai Securities, Shenwan Hongyuan Securities, Haitong Securities, and Guosen Securities
China’s retail mutual fund market has combined assets of around $3.6trn invested in 8,300 products offered by 151 fund managers, according to the Asset Management Association of China website.
China officially lifted the investment limitation for foreign fund management firms joint ventures with mainland Chinese retail mutual companies in April 2020.
Earlier this year, Blackrock de-registered its private fund management (PFM) unit, which it set up three years ago within its Shanghai-based wholly-foreign owned enterprise (WFOE) to sell private funds to eligible, wealthy investors to invest in the onshore A-share market. However, the FMC licence cannot co-exist with maintaining a PFM licence, according to Chinese regulations.
Blackrock was approved as the first FMC in China in June this year, and subsequently applied to launch its first onshore public mutual fund invested in domestic securities on 1 July.
Besides Blackrock, Fidelity was also granted an FMC licence earlier this month. Other foreign asset managers that have filed the application for the licence are still waiting for regulatory approval, including Neuberger Berman, Schroders PLC and VanEck, according to the CSRC.
