Will MSCI include China’s A-shares? Five views
18 May 17
Asset management professionals share their views on the MSCI’s upcoming decision about whether or not to include China’s A-shares in its emerging market indices with our sister publication Fund Selector Asia.
Victoria Mio, China CIO at Robeco, said the firm’s active and quant teams have debated the issue.
“The asset management industry has raised a lot of concerns regarding the inclusion. Internally we have heated debates on major pros and cons of A-shares inclusion, between colleagues from active strategies and quantitative strategies,” she said.
The firm concludes that inclusion is an overall positive.
“Given there is a high chance for the inclusion, we have increased our exposure to A-shares. From both strategic and portfolio perspectives, we believe we are well-positioned to benefit from an A-shares inclusion,” she said.
Mio said the firm has been preparing for A-shares inclusion for quite some time, including setting up a new investment team in Shanghai last year.
“The inclusion, albeit a small one, would definitely boost sentiment. It would force global investors, particularly index-tracking funds, to invest onshore.”
The firm forecast that both A-shares and H-shares will deliver double-digit returns in 2017, based on its model that evaluates macro risk, valuations, earnings revisions and technical and sentiment factors, she added.
“This year we slightly favor H-share [investment] due to better earnings revisions, higher return on equity, stronger global fund flows, and better technicals.”
