The RMB-hedged share class was added in the Manulife Asia Pacific Mid and Small Cap Fund on 5 September.
The introduction of the new share class is due to the optimism over the Chinese currency and also follows the removal of target restrictions on RMB-denominated pooled investment funds by the Financial Supervisory Commission on 1 July.
Previously, investment funds were required to invest at least 60% of the assets under management in RMB-denominated securities if they sought to launch RMB-denominated pooled investment funds or share classes.
“We are optimistic on the RMB, and aim to form a diversified RMB-denominated investment space where we see opportunity,” a company spokeswoman said.
Optimism on RMB
Noting the Manulife’s Investor Sentiment Index results, Thomas Cheong, chief executive of Manulife Asset Management Taiwan said: “The MISI survey shows that Taiwanese respondents are generally positive on RMB deposits and RMB-denominated mutual funds. We attribute this partly to anticipation of long-term RMB appreciation. This anticipation is one reason we’ve seen a steady rise in the amount of domestic RMB assets held by domestic bank units in the past 18 months.”
Andrew Wang, chief investment officer said the RMB-denominated fund platform represents an attractive channel for RMB investment in Taiwan at an ‘opportune’ time as the fund house expects China to remain one of the fastest growing economies.
Wang said his optimism comes from better than expected second quarter growth, growing trade settlement in RMB, the upcoming Shanghai-Hong Kong Stock Connect program, and increasing institutional investor allocation to RMB-denominated financial instruments.
“These are developments that give us a reason to be optimistic on further RMB appreciation,” Wang said.
The new offering complements the company’s three existing RMB-denominated classes in China-focussed funds: the Manulife Oriental Pearl Short Term Income Fund, the Manulife China Offshore Bond Fund and the Manulife China Dim Sum High Yield Bond Fund.
Manulife Asset Management said it aims to form a diversified RMB-denominated fund platform that offers offshore RMB-denominated investment-grade bonds, offshore RMB-denominated high-yield bonds and Asia Pacific mid- and small-cap equities.
The Manulife Asia Pacific Mid and Small Cap Fund invests primarily in listed and over-the-counter mid- and small-cap equities in Asia Pacific (ex-Japan) with market capitalisation below $3bn.
One-year performance of MSCI Asia Pacific small-, mid-, and large-cap indices:
