WHY CHINA A-SHARES?
SECULAR TRENDSSECULAR TRENDS TO FUEL ECONOMIC GROWTH
We expect the macroeconomic environment to be relatively stable. A hard landing is unlikely given a certain speed of growth is needed to facilitate the smooth implementation of the structural reform and deleveraging process. Meanwhile, China’s average per capita consumption and income are expected to see a significant increase in the next decade, which will likely translate into strong potential for consumer sectors in the country.
With the continued shift to a consumption-driven economic model from an investment-driven one, China is expected to make better progress in achieving her long-term economic goals. Secular trends may provide different sectors, especially those related to “New China”, with abundant growth opportunities and set a favourable backdrop for equities.
Average per capita consumption is calculated based on working-age consumers.
"Middle-class/affluent households” refers to households with annual disposable income of at least US$21,000.
Source: McKinsey Global Institute “Urban world: The global consumers to watch” (April 2016) and “China’s choice:
Capturing the $5 trillion productivity opportunity” (June 2016).
POSITIVE EARNINGS GROWTH PROSPECT FOR A-SHARES
The increasing breadth and quality of corporate earnings growth in the A-Share market are supportive for equity performance. With a more diverse sector composition combining growth and income potential, the A-Share market provides a diverse opportunity set across cycles.
Source: FactSet, MSCI, J.P. Morgan Asset Management.
Cyclicals and defensives are classified according to MSCI’s sector classification.
**Both Financials and Real Estate are classified as financials sectors and all constituent securities from these two sectors are included accordingly.
Guide to the Markets –Asia. Data reflect most recently available as of 31.03.2018.
INCREASING FOREIGN OWNERSHIP FROM INDEX INCLUSION
MSCI’s inclusion of A-Shares in its indices may help raise interest in A-Shares from foreign investors, thanks to the easier access to the market and a more diversified investible universe. China’s equity market will likely see more support as foreign flows increase.
* Source: MSCI “Consultation on China A-Shares Potential Inclusion” (June 2017), Citi Research, J.P. Morgan Asset Management, as of 24.10.2017.
WHY J.P. MORGAN ASSET MANAGEMENT?
Global Capabilities
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) INTEGRATION
ESG factors are embedded in our investment capabilities across equity, fixed income and multi-asset solutions.
Source: J.P. Morgan Asset Management, as of end-December 2017. Stated AUM figures exclude retail advisory and glide path portfolios.
A leader in A-Share investing
■Total assets under management of pooled vehicles run on the China A-Share growth strategy.
♦In 2006, J.P. Morgan Asset Management was the only global asset management company eligible to run a QFII fund which invests directly into the China A-Share market. In 2014, J.P. Morgan Asset Management launched the only SFC-authorised equity fund which invests in China-A-Shares under the RQFII scheme and is managed by a global asset manager. The authorisation from SFC does not imply official recommendation.
Source: J.P. Morgan Asset Management, as of end-March 2018.
WHY INVEST IN JPMORGAN CHINA A-SHARE OPPORTUNITIES FUND / JPMORGAN CHINA PIONEER A-SHARE FUND?
1. A “best idea” portfolio of Chinese equities
The A-Share market’s diverse sector composition allows the Funds to capture long-term growth opportunities, which can be found in sectors with bountiful “New China” plays. Meanwhile, the fund managers take a “best idea” approach with a focus on quality Chinese companies, benefitting from the comprehensive research and local knowledge of our investment team.
2. Bottom-up stock selection supported by macro insights
The fund managers integrate bottom-up stock selection with top-down macro and policy views to identify top performers over the longer term, supported by the macro strategists of our Emerging Markets and Asia Pacific (EMAP) Equities team.
3. Access to A-Share investing with RMB/USD as base currencies
The JPMorgan China A-Share Opportunities Fund is denominated in RMB with two share classes, while the JPMorgan China Pioneer A-Share Fund is denominated in USD, offering different choices to investors with different needs.
FUND HIGHLIGHTS
Extensive exposure to A-Shares across a wide variety of sectors
Long-term capital growth potential by participating in “New China” investing
Diversification of China plays away from the offshore markets
View Fund Information: JPMORGAN CHINA A-SHARE OPPORTUNITIES FUND / JPMORGAN CHINA PIONEER A-SHARE FUND
ESG Integration is the systematic inclusion of financially material ESG factors, alongside other relevant factors, in investment analysis and investment decisions with the goals of managing risk and improving long-term returns. ESG integration does not by itself change this product’s investment objective, exclude specific types of companies or constrain its investable universe. This product is not designed for investors who are looking for a product that meets specific ESG goals or wish to screen out particular types of companies or investments, other than those required by any applicable law such as companies involved in the manufacture, production or supply of cluster munitions. The Fund is not authorised as an ESG fund by the Securities and Futures Commission, nor is it being marketed as an ESG fund.
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