Muller said she sees opportunities emerging in the mainland market.
“We have applied for an RQFII licence. That will be a new area in terms of product development and we have increased the China A-share team in Hong Kong,” she told FSA.
The RQFII scheme allows international investors to tap the large pools of offshore RMB funds, providing more efficient access to China’s onshore capital markets.
Out of the BRIC countries, most investors find China interesting due the promise of structural reforms and the regulatory reform of domestic capital markets, Muller said.
Initiatives like the Hong Kong-Shanghai stock market connect, expected this month, and the planned mutual recognition of funds between China and Hong Kong will expand the opportunities further for investors in China, she added.
Principal joins other asset managers seeking to tap the demand for RMB products by launching new funds or by introducing new share classes following the Chinese government’s measures to take the RQFII pilot programme out of Hong Kong to Singapore, the UK, Germany and South Korea.
Other Initiatives
The firm is working with Principal International Hong Kong to develop local products that suits the needs of the Mandatory Provident Fund.
Furthermore, the company plans to increase resources in the client servicing and sales support functions.
“We have added sales and support recently and will continue to do that in 2015, possibly in Hong Kong and Singapore. As our business expands, we need to do this more in client-facing areas.”
The assets under management of Principal Global Investors have grown to $330bn now from $280bn at the beginning of 2013. Asia Pacific assets amount to $26bn excluding the assets of joint ventures.
Muller added that this year the firm is seeing investments in real estate, real estate investment trusts (REITs), global equity income products, and yield-oriented solutions.
