Value Partners has launched its first Renminbi Qualified Foreign Institutional Investor (RQFII) fund, which will offer investors a direct and broad exposure to China’s mainland stock market.

The newly launched Value Partners China A-Share Select Fund is an actively managed A-share equity fund that has a mandate to invest in Shanghai- and Shenzhen-listed companies of various sizes and industries. Value Partners, which was granted its first batch of RQFII quota of 800 million renminbi (US$130.4 million) last October, will apply that quota to the new fund, the company said in a statement.

The fund will be a first in a series of RQFII products Value Partners is developing for clients. The Hong Kong-based asset manager obtained a fresh round of RQFII quota of 500 million renminbi in April. As of September, Value Partners manages US$800 million in A-share assets. Value Partners manages a total of US$11.2 billion in assets.

The new fund is being introduced ahead of the much-awaited implementation of the Shanghai-Hong Kong Stock Connect, a cross-border stock-trading scheme between the two cities.

“The upcoming launch of the Shanghai-Hong Kong Stock Connect program is set to unveil more A-share investment opportunities which we aim to capture,” said Timothy Tse, chief executive of Value Partners.

China is the world’s third-largest stock market, which has captured increasing attention from global investors because of its attractive valuations. China’s A-share market has experienced a multi-year slump that has dragged down valuations to record low levels.
The A-share fund seeks to capture a wealth of A-share opportunities including investments in quality small and medium companies with strong profitability and attractive valuation, as well as high-dividend stocks that may benefit from the narrowing of valuation gap between A and H shares. There are over 2,530 A-shares as of August, up from just eight in 1990.