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What next after MSCI inclusion?

Wealth and asset managers give their views on the implications of the MSCI inclusion of A-shares and where they find investment opportunities onshore.
by Fund Selector Asia
Chinese asset manager

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Yannan Chenye, head of China equities research and portfolio manager at Harvest Global Investments, the international arm of the Chinese fund house, said the firm will gradually increase A-shares in its active portfolios following the MSCI announcement.

“Large-cap stocks accessible via the Stock Connect will benefit most under MSCI’s new proposal of China A-share inclusion,” she said, adding that A-share-focused ETFs could also see greater demand in the short term.

For Harvest GI, “we focus on quality growth stocks which are trading at reasonable valuations and exhibit good growth-at-reasonable- price (GARP) characteristics. We are also interested in investing in those stocks/sectors that are not available in offshore Chinese markets”, she noted.

For example, she sees opportunities in some leading companies listed onshore in the “smart manufacturing” or manufacturing upgrade sector.

“Their hard working culture, local knowledge, service capability, and increasing dedication to research and development have helped some companies become significant players globally. They might be trading a bit higher than global valuation multiples, but well justified for a higher growth potential,” she explained.

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