Gottex Fund Management Holdings, an asset manager that oversees $8.5 billion, has started a long-only fund that will give European individual investors access to yuan-denominated shares in China.
Gottex and its Shanghai-based partner VStone Asset Management plan to start other funds that invest in the yuan class-A share market later this year, Max Gottschalk, Gottex’s Asia chief executive officer, said in an interview. They will include ones focused on initial public offerings and ones that use quantitative analysis to pick stocks.
The CSI 300 Index, which tracks yuan stocks, jumped 48 percent this year through June 5. The Shanghai Composite Index is the best-performing of 92 benchmark index tracked by Bloomberg in 2015, bolstered by monetary easing to boost economic growth and the relaxation of restrictions on foreign investment in the world’s second-largest stock market.
“We think it’s still a good time to be investing in China,” said Gottschalk, citing the easing, financial reforms and the likelihood that yuan shares will be included in major international indexes. “There are few actively managed A-share funds available” to European individuals.
The Gottex VStone Yellow Mountain Fund started last week and is the first product tailored for foreign investors that Gottex started with VStone. It may gather $25 million within its first week, Gottschalk said.
It will invest in no more than 40 stocks listed in Shanghai and Shenzhen, using the 500 million yuan ($80 million) qualified foreign institutional investors quota Gottex received last year, he added. The UCITS fund was set up under the European Union’s Undertakings for Collective Investment in Transferable Securities regulation.
VStone, founded by former China Life Insurance Group and Fullgoal Fund Management Chief Investment Officer Chen Jiwu, has about $800 million of assets under management in private funds in China.
Hermes Investment Management, a London-based money manager overseeing 154.4 billion pounds ($236 billion) of assets, last year partnered with China Southern Asset Management to start a UCITS fund that invests in yuan stocks, according to a September statement.