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Investec brings China fund to Malaysia

The firm has partnered with Kuala Lumpur-based TA Investment Management to launch its China-focused equities fund, which is up 70% over three years.

The TA All China Equity Fund is the locally-wrapped version of Investec’s All China Equity Fund and is available to qualified investors, according to a statement from the Malaysian firm..

This is the first time that Investec has partnered with TA IM to offer funds in Malaysia’s domestic market, according to an Investec spokeswoman.

“Southeast Asia is an important area of growth for us. We are committed to strengthening our presence and product offerings there,” the spokeswoman said.

The fund will be TA Investment’s first China-focused offering.

TA Investment manages 21 funds, which include Shariah and non-Shariah products that invest in Malaysia’s domestic markets, as well as regional and global markets, according to the firm’s website. As of the end of May, it managed RM 1.93bn ($470m), which includes mutual fund products and direct mandate portfolios.

Investec’s All China Equity Fund invests in both the onshore and offshore Chinese markets, according to the fund factsheet. Nearly 50% of assets are invested in H-shares and 36.9% in A-shares. The fund is also concentrated with only 39 holdings.

“Currently, Chinese equities appear attractively priced as the valuation is cheaper compared to other markets,” Wong Mien, TA Investment’s CEO, said in the statement.

Demand for China?

There are only a few mutual funds in Malaysia that focus in Chinese equities, most of which are feeder funds. Data from FE Analytics show there are only six China-focused equity funds.

One of those funds, which is CIMB-Principal’s China Direct Opportunities Fund, is Malaysia’s first product that has direct access to onshore China A-shares via the renminbi qualified foreign institutional investor (RQFII) channel.

Launched in March, the firm saw unexpected demand for the product and had to increase its RQFII quota to RMB 1.6bn ($250m) from RMB 600m as the previous quota was fully utilised by the fund.

Before rolling out the RQFII fund, CIMB-Principal also launched the country’s first China-focused multi-asset asset fund last year, which is the locally-wrapped version of the Hong Kong-domiciled HSBC China Multi Asset Income Fund.

Other China funds offered in Malaysia include the Affin Hwang World Series China Growth Fund, the Am China A-Shares Fund and the Manulife China Equity Fund, according to FE Analytics.

The Investec All China Equity Fund versus the sector in Hong Kong

Source: FE. Trailing three years. Fund and sector NAVs have been converted to US dollars. The fund’s benchmark index, the MSCI All China Index, is not available on FE.

Part of the Mark Allen Group.