Asset Management Awards for Excellence 2017 – Best Fund Provider – A-shares

Schroders Investment Management (Hong Kong) Limited

Jack Lee, Head of China, A-Share Research

Jack Lee
Head of China
A-Share Research

An early 2016 sell-off rocked China’s broader equity market a little too hard and it struggled to make up grounds despite improving macro fundamentals, closing the year down by more than 12% compared with the MSCI World’s +8.5%. A resilient 20% rally was swiftly halted by a brash, newly elected US president that has publicly targeted China for potential trade conflicts, offsetting solid fundamentals and accommodative monetary policy.

Despite these external shocks, most remain certain that China’s rise – while moderated – will continue, providing for an attractive horizon when compared to low-growth developed markets.

The Party’s promise to steer the nation towards the “Chinese Dream” will include a groundshaking transformation of its economy, from reliance on traditional capital-driven sectors to consumption-led growth. The impact of this shift is already being felt on the ground – and even in equity markets. In the first ten months of 2016, a benchmark tracking new economy sectors like IT or consumer discretionary outperformed the Shanghai Composite +3.89% versus -12.3%.

During this transition, there is little doubt that market inefficiency will be significant for active bottom-up investors seeking alpha.

In a market dominated by local specialists, Schroders has managed to overcome the ‘home court advantage’ through its 19-strong network of on-the-ground research analysts in Hong Kong and Shanghai. In light of domestic needs, it continues to develop and expand its proprietary research capabilities in China, with the growth of new sectors demanding new data and insights.

Gatekeepers, who closely eye what will soon become the largest economy in the world, have selected Schroders as their conduit to the market, making the firm this year’s Best Fund Provider – A-Shares.