Fidelity has launched its China Consumer Fund in the UK, following high investor demand for the offshore product.
The £155 million Luxembourg-domiciled fund, a mirror image of the onshore fund, previously launched in February.
The UK sterling version, benchmarked against the MSCI China index, exploits China’s growing consumer market by investing in local companies selling goods directly to Chinese people. It will hold between 80 and 120 consumer stocks.
Manager Raymond Ma says the Chinese consumer sector is ‘expanding rapidly’ with over 100 consumer-related IPOs made every year, compared to just 10 each year on average in the pre-development years.
‘The expansion of the consumer sector is reflected in the size of companies too. A decade ago, the majority of consumer stocks had a market capitalisation of less than $500 million (£315 million). Today, market capitalisation typically ranges from $2-3 billion (£1.2-1.8 billion),’ he says.
Ma adds: ‘As more pro-consumption policies are introduced in the next few years, I believe consumption will rise significantly, creating more and more investment opportunities.’
The onshore China Consumer Fund is the latest in a suite of UK Asian equity funds from Fidelity. In July, Fidelity launched the onshore Emerging Asia Fund, while the South East Asia fund and Anthony Bolton’s China Special Situations Investment Trust are also available to UK investors.
The minimum investment in the fund is £1,500 and the annual management charge is 1.5 per cent.