Winnersrationale

Marked by a year of unusual volatility, the China A-share market is a market that remains challenging to navigate, despite its attractive opportunities. The SICAV JPMorgan Funds – China A-Share Opportunities Fund has, however, emerged as a strategy that consistently outperforms its peers and continues to garner interest in the face of extreme market turbulence.

Just as many of its Asia-Pacific counterparts, the China A-share market is characterised by market inefficiencies, including a high participation rate of domestic retail investors, which creates pricing anomalies that are less common in developed markets, and inconsistent disclosure and transparency of companies. But for an expert fund manager such as J.P. Morgan Asset Management, the market inefficiencies imply rich opportunities for alpha generation, especially during periods of volatility and price dislocations.

The Fund takes a growth-oriented approach and relies primarily on bottom-up stock selection — while also being mindful of macroeconomic conditions and the policy environment. It emphasises higher growth, higher quality, and higher return of its investments. The research process involves giving each stock a strategic classification that evaluates the long-term business fundamentals of each company by looking at economics, duration and governance. The quality of the portfolio of companies is scrutinised through an integrated ESG framework: the research process includes a 98-question risk checklist, three quarters of which are questions concerning ESG.

Thanks to the rigorous research and screening process, the Fund generated an excess return of 3.58% YoY compared to the benchmark of CSI 300 Index (Total Return Net). The excess returns on a three-year and five-year basis have remained strong at 8.78% and 6.93% respectively. The Fund recorded an annualised return of 16.10% since its inception in 2015.

Global investors have responded positively to the Fund as a result of its resilience in challenging times. As of the end of August 2021, the Fund received net positive inflows of about US$6.3 billion throughout all distribution platforms globally — a five-fold increase compared to a year earlier. Across private banking platforms in Asia, this positive inflow has held throughout every single month of 2021, despite gloomier investor sentiments more broadly for the A-share market.

A strategy that proves its value not only in times of boom but equally in times of stress, the SICAV JPMorgan Funds – China A-Share Opportunities Fund is testament to the expertise of the fund manager and its commitment to long-term structural growth trends in the China market.

J.P. Morgan Asset Management is therefore selected as the Best Fund Provider – China A-shares Equity by Asian Private Banker.