Top 9 Reasons Why Islamic China A-Share Fund Is A Real Deal.

Eastspring's Latest & Most China Concentrated Fund Ever!

adezeno.so

Aug 26, 2021

What’s so cool about this fund?

While some investors already have exposure in Eastspring Dinasti Equity Fund. Why another China Fund?

To they are two ways to invest in China equity.

1: Via Hong Kong Stock Exchange (H-share)

Think Alibaba, Tencent, JD.com, Meituan, etc.…

2: Via Shanghai & Shenzhen Stock Exchange (A-Share)

Think BYD, Midea Group, WuXi AppTec, China Tourism Group, Xi’an LONGi Silicon Materials company, etc.…

However, most investors cannot directly invest in A-Share because of the regulation by China for foreign investors.

How Big is A-Share?

Over 4,000 counters are traded in Shanghai & Shenzhen stock exchange, compared to only 291 counters in Hong Kong Stock Exchange.

This means the fund manager will have a bigger playground for stock selection, and investors have good diversification opportunities.

A Universe Too Big To Ignore?

China A-Shares is the 2nd largest equity market globally after US. by market capitalization & cash turnover.

Solid Revenue & Earning Growth.

Well, if all of the above still does not impress you, check this out.

Earnings per share (EPS) is calculated as a company's profit divided by the outstanding shares of its common stock. EPS serves as an indicator of a company's profitability

From the chart above, China A-share (as a general market) has a Compound Annual growth rate (CAGR) of 12% per year for the past 9 years (2010 to 2019)!

The aggregate Revenue & Earning has been on the rising trend since 2006. Therefore, investors can only expect steady growth from this juncture. Why? I will explain below.

China A-Share Focus On a Different Story

China companies listed in Hong Kong are mostly in the Energy & Utility sector.

China A-share paints a different picture; the “New Economy” focuses on Small-cap to Mid-cap stocks in areas such as consumer, IT, industrials, and healthcare.

China Dual Circulation Policy Is The Key 🔑

In the year 2020, China launched “DUAL-CIRCULATION” that focus on the two items:

First, to build a “digital China” with Tech self-reliance.
Second, expand domestic demand with innovation driving and high-quality supply.

This top-down strategy can be seen as very effective because the chain of command is top-down in China. Therefore, when the “boss” in the country said so, the rest shall follow.

“In short, China’s dual circulation strategy involves tapping into its huge domestic market of 1.4 billion consumers. Increase the size of its middle class and narrow the wealth gap so domestic consumption will increase.” -source: scmp.com

As an investor that has direct exposure to China A-share, you too can be benefited.

China Self Reliance In Tech & Domestic Demand.

Under the Dual-Circulation policy, Tech self-reliance is one of the national strategic pillars. The graph below clearly shows that the floor is rising for the Chinese Semiconductor companies. By the year 2030, 40% of the total Semiconductor will be manufacture domestically.

Covid-19 only Speeds Up Technology Adoption In China,

imagine shopping for your favorite fish, chicken, vegetable on your smartphone and had it delivered to you in 30 minutes. This is that trending in China.

9: Why Islamic China A-Share?

The Benefit from Islamic Screening on the stronger company fundamentals will add additional risk filtering.

There are two filters to this.

Sector Based Screens
Income from the following impure sources can not exceed 5% of revenue.
Alcohol
Tobacco
Conventional financial services Weapons & defense Entertainment
Accounting Based Screens
All of the following must be less than 33%
Total debt divided by trailing 24 months average market capitalization
The sum of a company’s cash and interest-bearing securities divided by trailing 24-month average market capitalization
Accounts receivables divided by trailing 24-month average market capitalization

Here you go.. 9 top reasons for you to invest in this new fund.. No FUD, No Hype.. just facts.

If you like this kind of info, subscribe to the email. I don’t charge a dime hehe :

cheers and stay safe.

adezeno