RETAIL FUNDS | Terry Gangcuangco, China

JF China New Generation Fund launched by JPMAM

J.P. Morgan Asset Management (JPMAM) has launched the JF China New Generation Fund, JF’s second open-ended fund investing in China’s A-share markets.

The newly launched fund aims to provide investors with long-term capital growth by investing primarily in the Mainland’s domestic consumption-driven opportunities via its own Qualified Foreign Institutional Investor (QFII) quota. The fund will also invest in fixed income instruments denominated in RMB which offer stable income streams and the potential for currency appreciation.

Head of Retail Business Terry Pan said, "The economic development in China over the long run will remain rapid, contrasting against the backdrop of a protracted global downturn. The new generation of Chinese will be leading this growth. An increase in domestic consumption demand will play a valuable role in supporting higher economic activity. In our view, the one-child policy, urbanisation, and the government’s economic and social reforms are three key drivers for the forthcoming domestic boom in China. Accordingly, we believe that JF China New Generation Fund can help investors to capitalise on the growth opportunities offered by China during its transition into a domestic consumption-led economy. In addition, the domestic A-share markets offer a wider range of China investment opportunities than the H-shares, red chips and other Chinese companies listed in Hong Kong."

"Over the past decade, average real income grew by more than 10 percent p.a. in China while real consumption grew by 9 percent p.a. However, even after years of rapid growth, China’s overall consumption spending only amounted to US$1.7 trillion in 2007. The consumption growth potential for China, with its population of over 1.3 billion, is still vast," said Shumin Huang, Fund Manager of JF China New Generation Fund. "Therefore, we will invest 70-85 percent† of the Fund in China A-shares which are benefiting from the Mainland’s robust consumption growth. Property, retailers, insurance, banks, telecoms and brokers are some sector examples."

Arthur Lau, Fund Manager of JF China New Generation Fund, said, "The fundamentals remain supportive for RMB appreciation over the medium- to long-term given China’s large trade surplus. As the Chinese economy will probably recover more quickly and strongly than the US, we expect the RMB to resume a gradual appreciation trend of 3-5 percent p.a. in 2010."

JF’s Greater China Team is one of the largest in the region, together with the Pacific Regional Group, managing US$22.6 billion in the Greater China region as at 30 April 2009. Members of the team have on average 13 years of industry experience and are well-supported by 13 Shanghai-based investment professionals in China International Fund Management Co., a joint venture between J.P. Morgan Asset Management and Shanghai International Trust Co. in China.

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