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AIA enters Hong Kong’s retail funds arena

AIA Investment Management has received approval from Hong Kong’s Securities and Futures Commission (SFC) last week, according to the regulator’s website.

The products are the AIA Wealth Funds – Asia (ex Japan) Equity Fund, the Balanced Fund, the Capital Stable Fund, the China Equity Fund, the Corporate Bond Fund, the Government Bond Fund, the Greater China Equity Fund and the Growth Fund.

They are the firm’s first batch of mutual funds that will be sold to retail investors in the special administrative region (SAR), according to SFC records.

Two of the funds already exist and are available to Singapore savers via the country’s Central Provident Fund Board.

Technology exposure

The S$545m  (£307.9m, $384.8m, €352.2m) AIA Greater China Fund has 68% of AUM invested in Mainland China stocks, with its biggest sector exposures across the region to information technology, financials, consumer discretionary and communication services, according to its most recent factsheet (31 January 2020).

Alibaba, Tencent, Taiwan Semiconductor Manufacturing, AIA and ICBC are among the portfolio’s top five holdings.

The fund has generated a 25.62% three-year cumulative return, outperforming its sector average return of 16.61% in US dollar terms, according to FE Fundinfo data.

The AIA Growth Fund was launched 25 years ago and is also included in the Singapore Central Provident Board product offering.

The S$710m fund is a balanced product, typically 70% invested in Singapore equities and 30% in Singapore fixed income securities.

Top equity holdings include the city state’s leading banks: DBS, OCBC and UOB, as well as Singapore Telecom and Capitaland, according to the latest factsheet (31 December 2019).

Its performance suffered in March as stock and bond prices fell sharply. It has posted a -3.03% three-cumulative return, compared with a -0.14% average return for the mixed asset (aggressive) sector.

Our sister publication Fund Selector Asia sought more information about all the funds from the firm, but it was not able to provide more details in time for publication.

Regulatory developments

AIA Investment Management’s licences in Hong Kong are relatively new. It received its asset management (type 9) licence in 2018, while it received its advising on securities (type 4) licence in March, the regulator’s records show.

The insurance firm, AIA Group, was established in 1919 in Shanghai and is one of the largest listed companies in Hong Kong, according to its website.

In the SAR, it has five investment-linked assurance schemes and 24 pooled retirement funds, according to SFC records.

Separately, another insurance firm set up an asset management entity in Hong Kong recently.

NY Life Investment Management, a subsidiary of New York Life, received a dealing in securities licence from the SFC in December and plans to provide services to professional investors.

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