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Despite the poor performance of China stock market in the first half of this year, Wandy Wang, general manager of China International Fund Management (CIFM), is confident of company's first product.
A joint venture between JPMorgan Fleming Asset Management and Shanghai International Trust and Investment (SITICO), CIFM plans to launch its first product - CIFM China Advantage - on August 9.
Shanghai Stock Index lost about 20 per cent since the beginning of this year, and investors are reluctant to rush into the market. Several funds launched earlier failed to attract as many investors as expected.
But Wang is not worrying about it and has set a target of 3 billion yuan (US$362 million) for the fund's initial offering.
"If an ice-cream store can survive the winter, it will survive any time of the year," she told China Daily.
Having 15 years' experience with JPMorgan Fleming in Taiwan, Wang said funds launched in such market environments usually brought in better results than those launched in better market condition.
She was confident JPMorgan's brand and reputation was well perceived among institutional investors, especially multinational ones.
But she also conceded that brand recognition among individual investors was pretty low. CIFM expects to subscribe half of its fund in this sector.
The target of the fund will be listed Chinese enterprises with a competitive advantage at the international level. At least 80 per cent of the fund's equity investment will go to such companies.
CIFM's research team has identified a stock pool of more than 300 in China.
Due to the absence of hedge tools in China, the weight of equity is set within a wide range from 30 to 80 per cent, and it can have up to 50 per cent bonds in the portfolio, making it a mixture of balanced fund and equity fund.
CIFM plans to establish a complete product line in the next three years with five to six products ranging from the most conservative to aggressive funds.
Wang said with a complete product line, CIFM will be able to deliver more added value to clients and cater to their various needs.
She stressed the company, as well as JPMorgan, looks at China from a long-term perspective, describing the fund industry as a marathon instead of a 800-metre run.
CIFM will not focus on a volatile short-term target or even involve in irregularities to achieve it, not unusual tactics among some industry players.
"It does not make much sense when you take the lead at the very beginning. More importantly, you should do everything during the whole process to ensure the long-term objective," said Wang.
Although she would not elaborate on the details of the objective, she said that CIFM aims to be one of the top 10 fund management firms in China in the next five years.
In addition to investing in domestic market, she said JPMorgan also has high expectations to issue overseas funds in China when regulation allows them to do so.
"As a joint venture, we have to realize what our strength is," she explained.
CIFM was set up earlier this year with a registered capital of 150 million yuan (US$18.2 million). JPMorgan Fleming Asset Management has taken an initial 33 per cent stake in it and SITICO, the principal financing and investment vehicle of Shanghai Municipal Government, holds the other 67 per cent.
(China Daily July 22, 2004)
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