Principal Asset Management has announced the launch of its CCB Principal China New Energy Innovation fund. It offers offshore investors access to sustainable investing in A-share listed companies related to the new energy industry, according to a statement by the asset manager.
Sectors include renewable power, electrical equipment, energy storage, and electric vehicles. CCB Principal Asset Management has managed a new energy sector onshore strategy since June 2020.
The new fund, which uses the CSI new energy index as its performance benchmark, “aims to provide investors in Asia with exposure to one of the highest-growth sectors in mainland China,” said Steve Chiu, CEO, asset management – Principal Hong Kong.
“The strategy aims to generate alpha and may enable undervalued companies to continue efforts to achieve positive environmental outcomes.”
The fund is available to institutional/professional investors only in Singapore and all investors in Hong Kong.
It will be managed by CCB Principal Asset Management (Hong Kong), whose parent company is Principal’s onshore joint venture (JV) with China Construction Bank (CCB) and China Huadian Group. The JV was set up in 2005, with CCB owning 65%, Principal holding 25% and China Huadian Group with a 10% stake.
The launch comes at a time when the Chinese government has made commitments to reduce carbon emissions, including reaching “carbon neutrality” by 2060, and has been investing heavily in energy transition since 2020.
This energy transition, bolstered by policy tailwinds, may provide ample high-growth investment opportunities in new energy subsectors such as photovoltaic cells, wind power, new energy vehicles, and energy storage, according to Principal.
The fund manager claims it will benefit from the specialised and locally based thematic equity investing insights in mainland China which focuses on both top-down factors, such as industry policy and supply-and-demand trends, and bottom-up fundamentals.
Moreover, a proprietary ESG approach, with a locally developed stock scorecard, is integrated throughout the investment process to ensure stocks meet sustainability standards.
Principal Asset Management is part of the Des Moines, Iowa-based Principal Financial Group, whose activities include insurance and pensions, and whose AUM $713.9bn, according to its website.
