BEA Union Investment China Gateway Fund (CGF)

Focuses on 3 key sectors

Technology adoption, healthcare, consumption premiumisation


Flexible allocation to mitigate short term volatility and foster long term return

Dynamic allocation between equities and bonds to enhance the potential capital appreciation and yields


Aims to provide monthly dividends

(Dividends are not guaranteed, and distributions may be paid out of income and/or capital) see important note 4

Annualised dividend yieldI as of April 2020, USD 3.7%, HKD 3.7% & RMB Hedged 4.5%


Focuses on 3 investment themes in China equities to captures opportunities in the new economy


COVID-19 has impacted many major economies. In contrast, the pandemic has been under control in China. The previously suppressed demand has been released. With the substantial policy support from the government, China is expected to take the lead in recovery and will be in a better position for growth potential. Moreover, built upon its solid fundamentals, Chinese economy has transited from speed of growth to quality of growth. Chinese assets have become major choices for individual and institutional investors. From a medium-term perspective, we believe that the three major themes in the stock market include:

Steady growth of global 5G infrastructure revenue forecast

Technology adoption

Chinese technology development has reached the world standard. Its hardware industry, e-commerce and internet sectors have become the market focus.


Hardware industry

  • 5G is seen as a game-changer for the world. Its core technology sets to create revolutionary business models.
  • China is accelerating its drive for technological self-sufficiency in the semiconductor business, to lessen its reliance on imports. Market leaders with technology differentiators will be in a more advantageous position to tap the business potentials and see their market shares expand further.

  • E-commerce and internet

  • The market size of e-commerce and internet in China is enormous. Many traditional businesses have transformed into e-commerce, speeding up the development and expansion of supply chain and prompting structural improvement.

  • Investment focus: semiconductor makers, large scale e-commerce, leading internet companies
    Huge growth potential of healthcare expenditure in China

    Healthcare

  • The COVID-19 outbreak will lead to a gold era in the healthcare sector. The market in China is expected to exceed RMB 8 trillion in 2020 and will surge to RMB 16 trillion by 2030II.

  • Investment focus: medical service, pharmaceutical, medical equipment

      II. Source: "Healthy China 2030" initiative, 15 July 2019
    Chinese citizen’s income growing rapidly Consumption upgrade is accelerating

    Consumption premiumisation

  • The trend of upgrading consumption continues to ferment among Chinese consumers, as the per capital income rises.
  • The pace is accelerating driven by the momentum of urbanization. The structure of consumption expenditures evolves rapidly.
  • The huge growth potential in mid to high-end consumption will serve as a major investment theme for the next five to ten years.

  • Investment focus: high-end wine, education institutions, retail brands

    Chinese bonds offer attractive valuations with low default rate, providing investors with opportunities in the second half of 2020


    Chinese high yield bonds offer attractive yield

    The Chinese government has taken a multi-pronged approach by increasing fiscal expenditure, relaxing monetary policy and providing supportive measures to provide more long-term funding, increasing market liquidity, in return alleviating corporate default risks.

    Offering low valuation and attractive yields, in addition to exhibiting a low correction with the oil price, Chinese high yield bonds have higher appeal than their US and European counterparts. Chinese bonds are expected to become one of the major asset classes for international investors, providing strong support for the fundamentals of Chinese bond market.

    Investment focus: Chinese government bonds, policy bank bonds, property bonds

    Dynamic allocation between equities and bonds Captures opportunities in the new economy


    The Fund frequently adjusts the mix of China A shares , Hong Kong equities, American depositary receipts (ADRs), offshore bonds, onshore bonds and cash through dynamic allocation. We actively search for investment opportunities from more than 5,400 companies, and act swiftly in response to market movement to mitigate short-term volatility. The Fund aims to capture opportunities in China’s new economy for long term capital growth and stable return.


    Dynamic allocation between equities and bonds Captures opportunities in the new economy

    The Fund aims to capture capital appreciation through stocks, and to enhance yield as well as to lower the overall volatility through bond holdings and through dynamic asset allocation.

    Dynamic asset allocation in multi-assets and cash