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Capital Group launches Asia (ex-Japan) strategy

This is the firm's first Asia-focused equity fund.

Capital Group has launched its Capital Group Asian Horizon Fund (LUX) in Asia, allowing investors to capture Asia’s secular growth opportunities with a global perspective, according to a statement from the firm.

The product is a high conviction portfolio and primarily invests in equities of issuers domiciled in the region. It may invest, up to 35% of its assets in A-shares via the Shanghai-Hong Kong and Shenzhen-Hong Kong stock connect schemes, the statement noted.

While the fund is focused on Asia, it has a flexibility to invest up to one-third of its assets in companies domiciled outside of the region, but have significant exposure in Asia, according to the firm.

“By combining local and global investments, we can better capture secular growth trends that are under-represented in the universe of local companies,” the firm explained.

While the firm already manages other emerging market equity strategies, this will be the firm’s first Asia-focused equity fund, according to data from FE Fundinfo. At present, Capital Group’s investments in Asia ex-Japan-domiciled companies total $179bn, according to the statement.

“Capital Group’s current suite of offerings do not have a product that specifically targets this investment universe. The launch of the Asian Horizon Fund is therefore a great opportunity for us to not only meet the growing investor appetite for Asia-related stocks but also for us to enhance our own product range,” the firm said.

The strategy is managed by Harold La, Sung Lee and Christopher Thomsen, according to the firm’s website.

“Developing and emerging Asia is set to account for almost 40% of global GDP within the next five years. Technology, healthcare, financials and communications are good examples of sectors in the region that are presenting exciting opportunities for growth,” Andy Budden, head of product and investment services in Asia-Pacific at Capital Group, said in the statement.

The product is available to retail investors in Hong Kong and Singapore, according to records from Hong Kong’s Securities and Futures Commission and the Monetary Authority of Singapore.

Capital Group has 31 registered Luxembourg-domiciled Ucits funds across equities, fixed income and multi-asset.

As of the end of last year, Capital Group managed assets of $2.3trn, the statement noted.

Part of the Mark Allen Group.