James Williams, Hedgeweek

Deutsche & Harvest launch Lux-domiciled physical China A-shares ETF… KIIDs still use too much jargon according to Kii Hub survey…

Asset management firms are still using too much jargon in their Key Investor Information Documents (KIIDs) and not enough plain language, as indeed they are required to do.

A survey of 110 advisers at the end of 2013 by Kii Hub found that 67 per cent of advisers believe most or all KIIDs continue to use jargon. They did, however, agree that the documents are clearer and “more concise” than other fund documents.

It has been 18 months now since asset managers were required to offer KIIDs to investors in every share class of UCITS funds offered to European investors. Central to this is the need to use clear language and avoid the use of jargon. It would, however, seem that few asset houses are taking heed of this. The Kii Hub survey found that only one in three advisers said that KIIDs use plain language to make them easier to understand than the Simplified Prospectuses they replaced.

Ian Overgage, Director of Technical Fund Marketing at Kii Hub, said: “Fund documentation has tended to be full of industry jargon and many groups have found it difficult to change that mind-set for KIIDs.  If fund groups produce more of their documents in plain language, this would help with investors’ understanding and improve confidence.”

Kii Hub provides a complete KIID production and delivery solution, including drafting, hosting, translation, monitoring and updating. 

Allianz Global Investors (AllianzGI) announced this week the launch of the Allianz Emerging Markets Equity Opportunities fund, to be managed by Kunal Ghosh. The Luxembourg-domiciled fund gives European investors the opportunity to access emerging markets using a systematic approach based on proprietary fundamental stock forecasts to exploit existing market inefficiencies. The eight-strong San Diego team led by Kunal Ghosh manages more than USD1.8billion. 
 
Kunal Ghosh was quoted as saying: “Greater financial and political stability, a burgeoning consumer base and abundant natural resources are powering many emerging market countries, creating attractive investment opportunities. This is set to continue as domestic consumption is the key driving force for emerging economies supported by wage inflation. The growth of middle-class consumers in developing nations is a significant global trend which means emerging markets still represent one of the few genuine growth stories investors are able to access.”

Ghosh said that the fund will invest in 100-150 companies with attractive risk/reward profiles based on a disciplined approach to stock selection, sensible risk controls and an alpha confirmation process “with the aim to deliver consistent risk-adjusted returns over time”.

Nick Smith, Head of European Retail Sales (Ex-Germany) at AllianzGI, added: “The story for growth in emerging markets is well understood, with favourable demographics, increasing affluence and growing economies these are the countries of the future. The fund fills a gap in our emerging markets equities offering, and a GBP-denominated share class of the fund will be available for UK investors right from the launch date. The fund launch has to be seen in our firm’s wider strategic initiative to strengthen our expertise and offering in emerging markets securities.”

Long-term UCITS attracted steady net inflows in November 2013 according to the latest investment fund industry fact sheet published this week by the European Fund and Asset Management Association (EFAMA). 


• Net sales of UCITS remained relatively steady in November attracting EUR20billion of net new cash, compared to EUR21billion in October.  
 


• Long-term UCITS (UCITS excluding money market funds) registered net inflows of EUR22billion, compared to EUR26billion in October. 

• Equity funds attracted net inflows of EUR11billion, down from EUR15billion in October. Bond funds registered net inflows of EUR7billion, compared to break-even point a month earlier.


• Money market funds registered reduced net outflows in November of EUR3billion, down from EUR5billion in October.   
 


The report found that total net assets of UCITS stood at EUR6.923trillion at end November 2013, representing a 0.9 per cent increase during the month. Peter De Proft, Director General of EFAMA, commented: “Investor sentiment improved after the ECB cut interest rates in November providing support to net sales of long-term UCITS, in particular to bond funds.”

Deutsche Asset & Wealth Management (DeAWM) and Harvest Global Investments Limited launched the first UCITS-compliant direct replication China A-shares fund in Europe on 6 January, 2014, reported rmb-business.com this week.

The db x-trackers Harvest CSI300 Index UCITS ETF (DR) is listed on the London Stock Exchange with the ticker code ASHR. It listed on the Deutsche Börse with code RQFI on 16 January. The launch of this Luxembourg fund follows a development in November 2013 that saw the Luxembourg regulator (CSSF) become the first European regulator to authorize an RQFII fund under the UCITS scheme. The new fund tracks the performance of the CSI300 Index, which itself tracks the performance of shares of 300 companies listed on the Shanghai Stock Exchange and the Shenzhen Stock Exchange.

The RQFII license was launched in 2011 and allows Hong Kong-based asset managers (both local and international) the opportunity to reinvest offshore RMB into China’s securities market.

DeAWM is part of the Deutsche Bank Group and has an estimated EUR944billion in assets under management. Harvest Global is a leading China asset management firm and has been granted an RQFII (Renminbi Qualified Foreign Institutional Investor) license by China’s financial regulator, the China Securities Regulatory Commission. 

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