Franklin Templeton has launched its new Franklin Sealand China A-Shares fund, a sub-fund of the Luxembourg-domiciled Franklin Templeton Investment Funds range registered as a recognised scheme for sale in Singapore.
The Franklin Sealand China A-Shares fund aims to provide long-term capital appreciation by investing primarily in China A-shares, the equity securities of mainland Chinese companies listed in Mainland China.
This includes China A-shares available through Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect, the Qualified Foreign Investor channel, Undertakings for Collective Investment as well as any permissible means available to the fund under prevailing laws and regulations.
The fund may also invest up to 20% of its portfolio in equity securities of Chinese companies listed on the Hong Kong Stock Exchange, including H-shares, Red-chips and P-chips.
The fund focuses on approximately 35 to 55 stocks for its portfolio, diversified across industries, sectors and market capitalisation with a focus on mid and large cap stocks. Its top ten holdings are expected to account for approximately 45% to 55% of the portfolio.
Managed by Franklin Templeton Sealand Fund Management, a Shanghai-based joint venture with Franklin Templeton, the fund’s investment team has strong onshore presence in China and a notable track record in managing China A-shares.
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Against the backdrop of improved access to the Chinese market with enhanced investor protection as well as market structure driven by continued reforms and the opening up of China’s capital markets, Franklin Templeton believes the strategy should appeal to investors who are looking to diversify their portfolios through high growth opportunities in onshore Chinese equities, says Franklin Templeton head of retail for Asia Christian Bucaro.
Meanwhile, Franklin Templeton Sealand Fund Management general manager and CIO Lirong Xu says the firm remains bullish on the medium to long-term development of the Chinese equity market amid the country’s significant economic growth potential.
“We believe that China's consumption-led post-reopening recovery is still on track, although it will require more time for it to pan out…With inflows into China equities on index inclusions and growth opportunities, supported by a shift in the country’s domestic money flows from household savings to equity assets, we are confident that the China A-shares market can provide good opportunities for active investors.”
