Barings launches pair of China best ideas funds

Barings Asset Management plans to launch two China best ideas funds in May.

Subject to regulatory approval, Baring China Growth will be structured as a British-domiciled ICVC, while Baring China Select will be an Irish-domiciled Oeic.

Both funds will be managed by William Fong and Angus Deng, who are members of Barings’ Hong Kong-based Asia Pacific equity team and run the offshore $7 billion (£3.5 billion) Baring Hong Kong China fund.

Both funds will be run in the same way, investing in 40-50 companies. Ian Pascal, marketing director at Barings, says that most of these will be Hong Kong-listed Chinese companies.

Unlike the existing Hong Kong China fund, which has been in existence since 1982, Pascal says the two new funds will have more of a bias to mid and small cap stocks.

“The Hong Kong China fund has grown rapidly over the past two years, and it is now invested more in mid and large cap companies,” says Pascal. “As such, the new funds look more like Hong Kong China used to before the rapid growth.”

Baring China Growth and China Select are exactly the same, the only difference being their domicile. Both the funds will be benchmarked against the MSCI Zhong Hua index.

China Growth will be the group’s first onshore China offering. Pascal says that it launched two versions of the fund because some British investors remain reluctant to invest in offshore funds.