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INVESTMENT BANKING | Staff Reporter, China

Julius Baer launches China Fund with direct access to domestic market

The Swiss bank used the US$100 million quota granted under its QFII licence by the State Administration of Foreign Exchange in China.

The fund provides exclusive access to the A-share markets giving investors broader and more in-depth exposure to the overall Chinese economy than many China products currently available to overseas investors. It will invest based on the macro outlook and themes and industries which will benefit from China’s 12th five-year plan as well as bottom-up stock selection based on quantitative and qualitative analysis.

Mr Kenneth Ho, Head of Products Asia Pacific, said, “We are in a unique position as a private bank to provide our clients globally with the opportunity to invest directly onshore in China, a market which is growing rapidly and offers so many interesting options for investors. China’s economic growth remains above-trend and retains strong fundamentals, representing a key driver of global economic growth, despite recent tightening measures. We believe the CNY will further appreciate this year.”

Mr Kenneth Ho commented, “A-shares provide attractive diversification benefits for investors due to their low correlation to other global markets. Both A- and H-share premiums have contracted to historically low levels, meaning that valuations are now reasonable. We anticipate a very high demand for this fund both now and long-term.”

Bank Julius Baer was awarded a QFII licence by the China Securities Regulatory Commission in December 2010 and is still the only private bank to hold one, allowing its clients access to onshore equity and bond markets.

Bank Julius Baer continues its ambitious growth strategy to make Asia its second Home Market. Its Hong Kong operation was promoted into a full bank branch late last year and the bank is set to open its Shanghai representative office within the year.

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