Both retail and private banking distributors are looking to have more thematic and China-focused bond strategies on to their fund platforms, according to Pauline Cheng, Neuberger Berman’s Hong Kong-based head of business development for financial institutions.
“In our ongoing discussions with distributors in the past 18 months, we were able to identify investment themes that they are looking for to address the product gaps on their platforms,” Cheng told FSA.
“Differentiated thematic strategies and China fixed income strategies are frequently brought up in the discussions.”
In response to client demand, the firm has decided to offer three additional products, which were previously only available to professional investors, to retail investors in Hong Kong, Cheng said. They include the Next Generation Mobility Fund, the Global Real Estate Fund and the China Bond Fund.
The three offerings have already received regulatory approval for them to be offered to public investors, according to records from the Securities and Futures Commission (SFC).
Previously, the firm’s retail offerings in Hong Kong included conventional flagship equity and fixed income funds, according to Cheng.
Neuberger Berman is relatively new to thematic investing. The Next Generation Mobility Fund, for example, only incepted in 2018.
Another thematic fund, the 5G Connectivity Fund, was also rolled out by the firm – first in Japan in 2018 and then in Taiwan last year. It was only in April that the firm launched a Ucits version of the 5G strategy, which has amassed $1bn in assets, according to Cheng.
Currently, the 5G fund is only available to professional investors.
“We are hoping to introduce more thematic products to [Hong Kong’s retail] market,” Cheng said.
The China Bond Fund is also relatively new and was incepted in March last year. The fund, which invests in renminbi-denominated China bond funds, now has assets of around RMB 906.9bn ($138.1m), according to its fund factsheet.
“We believe the inclusion of China bonds in major indices will drive future performance. We are also seeing increasing demand for RMB-denominated products in our ongoing discussions with distributors,” Cheng said.
The firm also has a China A-shares strategy, which was recently launched in September. Currently, it is only available to professional investors.
Meanwhile, the Global Real Estate Fund is a “natural extension” of the firm’s flagship US Real Estate Fund, which is already available to retail investors in the SAR, according to Cheng.