Asia continues to lag other regions for integrating ESG principles with investing; better data and stronger regulatory requirements will help institutional investors, market observers say.
The Canadian-owned insurance giant, which has boosted its share of the HK$146.3 billion ($18.8 billion) MPF market from 14.8% to 15.6% since the end of last year, says the move was "all about consumer choice".
As Nick Crouch, senior vice-president of Employee Benefits Asia comments, "What we're trying to do is build fund choice û that is the one obvious value-added thing we can do. We're a strong number two at the moment, but the number one still doesn't have external fund managers on its platforms or the breadth of funds we have, so this makes sense for both our business and our contributors."
The new "Manulife MPF China Value Fund" will bring the number of funds on the insurer's Global Select MPF Scheme up to 16. Currently there are seven equity funds, two bond funds and seven lifestyle funds, all with differing risk profiles.
The new fund, which will be managed by Value Partners, falls into the "very aggressive" profile of risk/return. VP already manages Manulife's retail version of the China fund, which has seen growth of "about 13%" since the beginning of the year.
According to VP's chief investment officer, Cheah Cheng Hye, the MPF China fund will have the same management style as its retail counterpart, but with a, "greater emphasis on downside risk". It will, therefore, only invest in Chinese stocks listed in Hong Kong, and not in ones listed in either Shenzhen or Shanghai.
Manulife currently has 720,000 pension accounts, with HK$30.7 billion-worth of assets. The new MPF China fund, which was launched on the February 1, currently has assets of HK$79 million.
The appetite of institutional investors for green, social, and sustainable bonds that bring clear environmental and socio-economic benefits shows no sign of waning.
The German insurer has plans for the property sector in Australia and China too.
Global investors are advised to look selectively at Japanese equities as the country recovers from lockdown and continues to improve corporate governance.
Weekly investor roundup: Sun Life weighs second ESG fund in HK; Korea's NPS reduces domestic equity allocation
Sun Life considers launching second ESG fund in Hong Kong as it banks on the growing theme; NPS lowers exposure to large-cap and other domestic shares; Temasek's Vertex Technology Acquisition Corporation becomes first special purpose acquisition company on the Singapore Exchange; and more