ING fund seeks China exposure outside the Mainland
Chinese stocks listed in markets such as Hong Kong offer a discount to Mainland shares while also gaining from the country's growth.
ING Investment Management has launched a fund that will invest in companies that stand to benefit from ChinaÆs growth but arenÆt listed on the mainland. The ING China Access Fund will invest in Chinese companies listed on international bourses including Hong Kong, Singapore and the US. The fund, which will have a basket of 30-40 holdings, will focus on intial public offerings (IPOs) and small- and mid-cap stocks.
Michael Chiu, a senior investment manager in ING Investment ManagementÆs greater China team, points to valuations as one reason a fund investing outside the mainland would be an advantage. He notes, for example, that H-shares listed in Hong Kong iffer an average discount of 35% compared with China A-shares listed on the mainland. Chiu says he is underweight on financial and real estate stocks and is positive on energy, industries undergoing restructuring such as aviation, and quality brands such as China Mobile.
Chris Ryan, chief executive officer of ING Investment Management Asia Pacific, says investors should take a long-term view of China. Ryan expects the fund, which has generated a lot of interest from investors in the Middle East, to raise between $200 million to $250 million.
ôThe world is missing whatÆs going on in China,ö says Ryan, adding that the country is entering a phase of maturity. Capital intensive industries, such as those that use heavy machinery production, are overtaking the labour-intensive and export-related industries that have been the focus of many investors in the past.
Ryan adds that timing is important when investing in ChinaÆs growth story, noting that Chinese President Hu Jintao has placed the emphasis on the sustainability of the mainlandÆs growth and how to spread this growth. Chongqing in western China, which is the fastest growing city in the mainland and is ôprobably going to be the next Shanghaiö and a reflection of the same pattern of growth that ChinaÆs coastal cities experienced in the 1990s, Ryan says.
Michael Chiu, a senior investment manager in ING Investment ManagementÆs greater China team, points to valuations as one reason a fund investing outside the mainland would be an advantage. He notes, for example, that H-shares listed in Hong Kong iffer an average discount of 35% compared with China A-shares listed on the mainland. Chiu says he is underweight on financial and real estate stocks and is positive on energy, industries undergoing restructuring such as aviation, and quality brands such as China Mobile.
Chris Ryan, chief executive officer of ING Investment Management Asia Pacific, says investors should take a long-term view of China. Ryan expects the fund, which has generated a lot of interest from investors in the Middle East, to raise between $200 million to $250 million.
ôThe world is missing whatÆs going on in China,ö says Ryan, adding that the country is entering a phase of maturity. Capital intensive industries, such as those that use heavy machinery production, are overtaking the labour-intensive and export-related industries that have been the focus of many investors in the past.
Ryan adds that timing is important when investing in ChinaÆs growth story, noting that Chinese President Hu Jintao has placed the emphasis on the sustainability of the mainlandÆs growth and how to spread this growth. Chongqing in western China, which is the fastest growing city in the mainland and is ôprobably going to be the next Shanghaiö and a reflection of the same pattern of growth that ChinaÆs coastal cities experienced in the 1990s, Ryan says.
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