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GF International to launch income fund in Hong Kong

The Guangzhou-based asset manager is ready to provide its second fund for Hong Kong's retail investors.

The GFI Income Fund was authorized earlier this week by the Securities and Futures Commission (SFC), making it available to retail investors in Hong Kong, according to the regulator’s records.

This move comes after the firm’s GFI Global Selective Fixed Income Fund received approval from the SFC in February last year. It was the firm’s first SFC-authorised product.

The fund invests 70% of its net asset value in fixed income securities issued by corporates and government agencies traded on international financial markets. They include senior unsecured debt, subordinated debt, collateralised and/or securitised products and convertible bonds, according to the Global Selective Fund’s factsheet.

However, in September 2018, GF International delisted its one and only ETF, the GFI MSCI China A International ETF. At the time, the passive product only had assets of RMB 20.6m ($2.97m).

Separately, the firm’s Guangzhou-headquartered parent, GF Fund Management, offers two mainland-domiciled funds, the GF Industry Leaders Mixed Asset Fund and the GF Juyou Mixed Assets Fund via the Mainland-Hong Kong Mutual Recognition of Funds Scheme (MRF), according to SFC records.

FSA contacted the firm for more information but it was unable to reply in time for publication.

Established in Hong Kong in December 2010, GF International Investment Management is a wholly-owned subsidiary of GF Fund Management, according to the firm’s website.

The subsidiary is licensed by the SFC to carry out Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities in Hong Kong.

It is also approved by the China Securities Regulatory Commission to participate in the qualified foreign institutional investor (QFII) programme and its renminbi equivalent (RQFII), the website noted.

London footprint

GF Fund Management is also one of the first Chinese asset managers to set up a wholly-owned entity in Europe. In 2015, it received regulatory approval from the Financial Conduct Authority in the UK, according to the firm’s website. Two years later, the firm launched an A-share ETF on the London Stock Exchange, according to a statement from the LSE regulator.

The product was the first ETF to track the FTSE China A Index, which is part of the FTSE Global China A Inclusion Index Series, according to the regulator.

“London Stock Exchange has experienced significant growth in the trading of exchange traded products in recent years and we are delighted to welcome GF Fund Management as the eighth Chinese issuer to list an ETF on our market,” Pietro Poletto, head of exchange traded funds for London Stock Exchange, said at the time of listing.

Part of the Mark Allen Group.