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BOCHK AM eyes second MRF product

There are seven other Hong Kong-domiciled MRF funds that are awaiting regulatory approval from the Chinese regulator.

BOCHK Asset Management in Hong Kong has filed an application with the China Securities Regulatory Commission (CSRC) to sell its Hong Kong-domiciled All Weather Asian Bond Fund to mainland investors via the Hong Kong-China Mutual Recognition of Funds (MRF) scheme, according to records from the regulator.

The fund was launched in 2016 and has $165m in assets, according to its fund factsheet. The fund invests in both government and corporate bonds issued in Asia-Pacific. Its top ten holdings include Bocom Leasing Management Hong Kong (2.0%), China Resources Land (1.6%) and property company Ronshine China Holdings (1.4%).

When approved, this will be the firm’s second northbound (Hong Kong-domiciled funds sold in the mainland) MRF fund, the first being the All Weather Hong Kong Equity Fund, which received approval from the CSRC  in 2018.

In total, the firm manages 42 SFC-authorised funds in Hong Kong, all of which are domiciled in the territory.

FSA sought more information from BOCHK AM, but the firm was not able to provide additional details in time for publication.

The MRF between mainland China and Hong Kong is a scheme jointly launched by the CSRC and the Hong Kong Securities and Futures Commission (SFC) in July 2015. Under the scheme, eligible mainland and Hong Kong funds can be distributed in each other’s markets.

Since the MRF began in 2015, 23 northbound products from 12 firms have been approved by China’s regulator, according to CSRC records.

So far, the CSRC has approved six MRF funds this year, which include the Amundi Disruptive Opportunities Equity Classic Fund, the JP Morgan Asia Growth Fund, the Pictet Strategic Income Fund and three products from HSBC Global Asset Management.

In total, there are eight pending MRF applications. The other seven products awaiting for regulatory approval include two from China Asset Management, two from Fidelity, one from Taikang Asset Management Hong Kong, one from E Fund Management (Hong Kong), and one from Income Partners, CSRC records show.

Since the scheme began, mainland investors have poured RMB 17.3bn into northbound MRF funds as of the end of May, according to data from China’s State Administration of Foreign Exchange.


The BOCHK All Weather Asian Bond Fund vs category average
Source: FE Fundinfo. Three year-cumulative returns in US dollars. Note: The fund does not have a specific index.

Part of the Mark Allen Group.