Posted inFund news

China’s asset managers well-positioned for MRF

A study of mainland asset managers shows those that have foreign partnerships or Hong Kong offices have an edge over those with foreign joint ventures when it comes to cross-border funds, according to Cerulli Associates.

With the Mutual Recognition of Fund scheme between Hong Kong and China set to start on 1 July, the research firm carried out analysis of 20 mainland managers. It found that all are well-placed in reaching out to distributors because they have their own subsidiaries operating in Hong Kong or foreign partners or both.

“This means that they will have less of a problem reaching out to distributors if they participate in the MRF scheme,” said the report.

“The same cannot be said of foreign joint ventures in China. They have struggled to consistently provide products and investment strategies that capture the interest of Chinese investors amid a very challenging distribution landscape.”

Moreover, demand for China funds in Hong Kong remains strong, the firm said, citing Hong Kong Investment Funds Association data. China-focused equity funds were the third best-selling category of equity funds in Hong Kong in the first quarter of 2015, after Asia ex-Japan and European equity funds.

“With such drivers in place, the odds look to be very much in favor of the China managers that have a presence in Hong Kong.”

Mansfield Mok, fund manager at EFG Asset Management, is one of many managers who has high hopes for the MFR. He believes the scheme will act as a catalyst in re-rating the offshore Chinese equity market.


Part of the Mark Allen Group.