Greg Kuhnert, co-Head 4Factor investment team, Ninety One:

Our long-term vision and our unique 4Factor “all-China approach” enable investors to capture the breadth of opportunities. An all shares approach to China is compelling due to high alpha potential while diversifying beta which suits skilled alpha hunters.  The behavioural component of our proprietary 4Factor process resonates with our clients who understand the substantial behavioural biases in Chinese equity markets. Our disciplined fundamental research and our adoption of very high standards of ESG integration and corporate engagement during an increasingly uncertain political climate also contributed to the winning of the mandate.

After establishing the 4Factor investment process 20 years ago, the 4Factor team recognised early on the future importance that China will play in the global investment universe and begun investing heavily in their dedicated China team based in Hong Kong. Now with five Mandarin speakers the fundamental research conducted on the ground in China ensures that they can build a high conviction portfolio of 30-50 Chinese companies that exhibit strong Quality, Earnings, Value and Technical characteristics. It is also this on the ground company research which is critical for identifying and understanding ESG related risk factors.

We have local colleagues, from sales and marketing to investment experts, servicing clients in Asian time zones. This allows us to handle clients’ enquiries quickly. The whole team runs a 24-hour operation globally to ensure timely and high quality service.

晋达资产管理，四大动力投资团队联席主管顾诺祈：

我们的长期视野以及独特的四大动力「全方位中国」投资方针，令投资者得以捕捉投资机会的广度。对中国市场采取全股份的投资方针相当具吸引力，因为高超额回报 (alpha) 潜力同时能够分散市场风险 (beta)，适合寻找超额回报的熟练投资者。我们的客户认识到中国股票市场存在大量的投资行为偏误，因此与我们专有的四大动力程序中的行为因子产生共鸣。我们严谨的基本因素研究、采用非常高标准的环境、社会及管治 (ESG) 融合，以及在政治氛围不确定性日益增加的环境中的企业互动协作 (engagement)，都有助我们获选。

在20年前建立四大动力投资程序之后，四大动力团队早期认识到中国对于未来全球投资市场的重要性，开始高度投资于位于中国香港的专属中国团队。现在有五位说中文的的成员在当地进行基本因素研究，确保他们能够建立一个由30至50只中国公司组成的投资组合，并展现强劲的质量、盈利、价值及技术等特质。在地企业研究团队也对于分辨及了解ESG相关风险至关重要。

我们有在地的销售、市场营销及投资专家，对位于亚洲时区的客户提供服务，这令我们能够迅速处理客户的问题。整体全球团队24小时运作，确保提供实时及高质量的服务。

Greg Kuhnert, co-Head 4Factor investment team, Ninety One:

Our all-China approach allows investors to flexibly invest across domestically-listed A- and B-shares, Hong Kong listed H-shares, red chips, P chips and US-listed American Depositary Receipts (ADRs). This is a universe of over 6,000 stocks, equating to approximately US$ 12 trillion of market cap, accessible to investors.

Making separate allocations to offshore China or onshore China remains a convenient way to circumvent China exposure that overlaps with existing emerging market or Asia allocations. However, this requires asset allocators to decide on portfolio exposure to the different listing locations for Chinese stocks (notably Hong Kong and mainland China). It may also require frequent rebalancing across portfolios during volatile markets. Taking an all-China approach, in our view, allows the flexibility to select the best Chinese stocks irrespective of where they are listed and focus instead on the underlying assets relative to the broader China universe. We believe this maximises the opportunity for alpha generation.

This wider pool of opportunities also provides access to a more diverse sector and company exposure. It therefore maximises exposure to best ideas across a variety of industries, enabling us to construct balanced portfolios. The all-China approach allows us to invest across themes which we believe underpin the long-term winners in China, from dominant players in the old economy benefitting from restructuring and reform and winners in the new economy to the consumer sector leaders that enjoy increasing brand power and market positions.

The flexibility of an all-China approach enables us to capture the most compelling opportunities regardless of where they are listed. This is particularly beneficial at a time when there is an increasing number of newly listed companies in mainland China and on the Hong Kong Stock Exchange. For example, US-listed ADRs are finding refugee in Hong Kong by securing a secondary listing there in anticipation of legislation that could force Chinese ADRs to de-list after three years.

晋达资产管理，四大动力投资团队联席主管顾诺祈：

我们的全方位中国方针令投资者灵活的投资于内地上市的A股及B股、中国香港上市的H股、红筹股、P股，以及美国上市的美国预托凭证 (ADRs)。投资者能够触及的这个投资领域包含6,000只股票，等同于约12万亿美元的市值。

对离岸或在岸中国市场做出单独配置，仍然是避免中国配置与现存的新兴市场或亚洲配置重迭的便利途径。然而资产配置者需要决定投资组合对不同上市地点的中国股票持仓（如中国香港及中国大陆）。就我们的观点，无论其上市地点为何，能够灵活选择最佳的中国股票，并且与广泛的中国投资领域相较，专注于基础资产，相信将能够创造最多超额回报机会。

较广泛的机会池同时也将提供更分散的行业及公司持仓的途径，最大化跨行业的最佳意念持仓使我们能够建立均衡的投资组合。全方位中国方针让我们得以投资于我们相信将支持中国长期赢家的不同主题，从受惠于重建及改革的旧经济主导企业，到消费行业领导者的新经济赢家，享受日益增强的品牌力量及市场地位。

全方位中国方针的灵活性，让我们无论公司上市地点为何，都能够捕捉最具吸引力的投资机会，这在中国大陆及中国香港交易所新上市公司数量上升的时期尤其重要。举例来说，由于法规可能会强制中国ADRs在三年之后下市的预期，美国上市的ADRs正前往中国香港进行第二上市以寻求庇护。

Greg Kuhnert, co-Head 4Factor investment team, Ninety One:

China’s equity markets are now the second largest (after the US) and possess distinctive features that represent the China growth story. We believe holding Chinese assets brings a tangible advantage given the potential to deliver higher risk-adjusted returns. The country leads in key technologies, including robotics and electric vehicles, and is the only nation outside of the US with several large, mega-cap technology companies. This growth looks set to continue, with China investing more than any other country in artificial intelligence – accounting for some two-thirds of global spend.

One of the strongest arguments for Chinese assets remains that they form a large market delivering uncorrelated returns while foreign ownership of Chinese equities remains very low. As Chinese markets open to international investors, international capital will rotate out of domestic developed markets. The resilience of Chinese equities has been underscored by its remarkable economic recovery this year, its effective control of infection rates and its strong advantages in the digital/internet enabled sectors of the economy. Given that China’s onshore equity market (China A-shares) represents approximately 70% of all Chinese stocks and is dominated by domestic private investors, we believe there are significant alpha opportunities for bottom-up active investors to tap into this growth. The picture further improves when one considers the low correlation between Chinese equities and other major equity markets, enhancing the potential diversification benefits that an allocation can deliver.

晋达资产管理，四大动力投资团队联席主管顾诺祈：

中国股票市场已是全球第二大（仅次于美国），且具备代表着中国增长机遇的独特特征。因为有潜力实现较高风险调整后回报，我们相信持有中国资产将带来有形的优势。中国在许多关键技术居领导地位，包括机器人及电动车辆，也是除了美国之外唯一拥有许多大型、超大型科技公司的国家。在中国比全球任何一个国家投资更多于人工智能的情况下（占全球支出的三分之二），这样的增长态势将持续下去。

对中国资产最热烈讨论的话题之一是，它形成一个大型市场、带来无相关性的回报，但外资持有的中国股票仍相当低。随着中国市场对国际投资者开放，国际资本将会从本国已发展市场流出。今年中国经济出色的复苏表现，强调了其股票市场的稳健性。中国有效控制传染率，以及在数码和互联网方面的强大优势，启动了经济的不同行业。在中国在岸市场（中国Ａ股）代表近70%中国股票，且由国内私营投资者所主导的情况下，我们相信有显著的超额回报机会提供给由下而上的主动积极投资者，发掘增长机遇。当投资者将中国股市与其他主要股市的低相关性纳入考虑，这个意象将更加鲜明，并强化作为一个资产配置所能实现的分散投资潜力。

Greg Kuhnert, co-Head 4Factor investment team, Ninety One:

Environmental, Social and Governance (ESG) integration is a priority for the leadership at Ninety One. We believe that treating material ESG issues as an integral part of the investment analysis brings greater benefits to the process rather than treating it as a separate procedure.

We have a dedicated global ESG team, which is steered by a senior Investment Governance Committee. Together with all the investment teams, the ESG team focuses on integration strategies, ESG research and engagement efforts.

Understanding ESG concerns and risk factors is an important component of 4Factor’s bottom-up analysis as we believe it helps us gain a better understanding of a company’s strategy, one of the four key attributes of our investment philosophy.

On an ongoing basis we are working to enhance the holistic integration of ESG research at various stages of the process. Arguably the most important stage of integration within the 4Factor investment process is in fundamental analysis; where many of the most subjective aspects of ESG understanding can be appraised and incorporated into the fundamental investment case. Each of our research notes includes a formal section that allows for discussion of ESG issues.

Beyond the research and investment stages of the process, another area we feel is key to our ESG efforts is that of engagement; acting as responsible shareholders on behalf of our clients. The investment team initiates engagements based on their investment research and priorities. We also have a dedicated team of eight ESG professionals split between our offices in the UK and South Africa. The ESG team work closely with the investment team to provide a supporting engagement strategy which targets specific holdings and material ESG themes that are significant to the firm, the investment team, and our clients. Our deep focus on ESG integration over the last several years has enabled us to avoid the many pitfalls that shareholders have encountered in China equities on governance issues. At the same time we are encouraged by companies stepping up their disclosure standards on ESG as we engage individually and collectively (Climate Action 100) with them.

We are confident that successful engagements on pertinent issues have the potential not just to fulfil the duty of shareholder responsibility but can also have a tangible long-term benefit to share price performance.

晋达资产管理，四大动力投资团队联席主管顾诺祈：

环境、社会及管治 (ESG) 的融合，对晋达管理阶层而言是优先事项。我们相信将重大的ESG问题纳入投资分析的一部分而非分开处理，将对程序带来更大的优势。

我们有一个专属的全球ESG团队，由资深的投资管治委员会主导。ESG团队与所有投资团队一同专注于融合策略、ESG研究以及互动协作的努力。

了解ESG问题以及风险因子是四大动力由下而上分析的重要成分，我们相信它将协助我们更深入了解公司策略 – 是我们投资理念的四个重要特质之一。

我们持续致力于将ESG研究完整融入投资程序的不同阶段。基本因素分析可能是与四大动力研究程序融合的最重要阶段；大多数ESG主观层面的了解可在此一阶段获得评估并纳入基本因素投资理据之中。我们每一份研究笔记都包含一个正式的章节以讨论ESG议题。

在投资程序的研究及投资阶段之外，我们认为互动协作是我们对ESG作出努力的关键；代表我们的客户，作为负责任的股东而行动。投资团队基于他们的投资研究及优先事项而发起互动协作。我们也有一个专属的团队由八位ESG专家所组成，分布于在英国及南非的办事处。ESG团队与投资团队密切合作，提供支持的互动协作策略，锁定特定持股及对公司、研究团队及我们的客户而言，重要的具体ESG主题。我们过去七年深入的专注ESG融合使我们避开许多投资者在中国股票在管治方面遇到的陷阱。在此同时，我们受到许多公司提高ESG披露标准的激励，因为我们与他们进行个别及集体互动协作 (Climate Action 100)。

对有关议题的互动协作，有潜力能履行股东责任的义务、同时对股价表现带来有形且长期的好处。我们对此抱持信心。

Justin Cowper, Head of Institutional, Asia Pacific Client Group, Ninety One:

The onshore China bond market has seen a significant broadening and deepening of issuance in recent years to become the second largest bond market globally, with a market capitalisation exceeding that of both German bunds and UK gilts. Index inclusions to flagship indices in 2019 and earlier this year have catalysed acceptance of this asset class into the investment mainstream.

China bonds provide investors with a diversified source of potential return and a significant yield premium compared with other asset classes. The decision by FTSE Russell to include China bonds in the WGBI is expected to inject another c$120bn of passive investment flows into China over the next two-to-three years. It also continues the mainstreaming of this asset class, evidenced by the country’s inclusion in other major bond indices such as the Bloomberg Barclays Global Aggregate Bond Index and the JP Morgan GBI EM Global Diversified Index. By including China, FTSE Russell acknowledged that ‘Chinese authorities have implemented significant improvements to the fixed income market infrastructure, facilitating easier participation by international investors. These market enhancements include: improving secondary market bond liquidity; enhancing the foreign exchange market structure; and developing global settlement and custody processes’.

Based on current projections, China’s eventual weight in the WGBI is expected to be c5.7%; similar to that of German bunds and above that of UK gilts.

Even before Chinese bonds started to enter mainstream market indices, improved foreign investor accessibility has spurred an increase in the number of overseas investors allocating to the asset class. Central banks and sovereign wealth funds started this trend, but today the investor base has expanded to include the wider global asset management community. This is thanks to a combination of improved market access and increased awareness among investors of the potential benefits to their portfolios of allocating to the asset class.

By the end of the first quarter of 2020, foreigners’ investments accounted for CNY 2.3 trillion (USD 328 billion) of the onshore CNY bond market, more than three times the amount seen five years ago.

Although it is growing, exposure to China is still relatively low in global bond portfolios. As foreigner investors gain more insight and comfort in this asset class, we believe that China bonds will feature increasingly in their portfolios. Therefore, we expect fixed income inflows into China to be a structural phenomenon in the years ahead.

晋达资产管理亚太客户团队，机构业务主管，Justin Cowper:

在岸中国债券市场的发行量在近年显著扩阔和深化，成为全球第二大的债券市场，市值超越德国政府债券及英国金边债券市场。自从2019年和今年初获纳入旗舰级指数后，中国债券逐渐获得投资主流所接纳。

与其他资产类别相比，中国债券为投资者带来多元化的潜在回报来源及显著的收益溢价。富时罗素决定将中国债券纳入世界政府债券指数，预计将在未来两至三年在中国市场进一步注入约1,200亿美元的被动型资金。此外，本资产类别继续融入主流市场，这从中国市场获纳入彭博巴克莱全球综合指数及摩根大通新兴市场政府债券全球多元化指数等主要债券指数可见一斑。富时罗素将中国纳入旗下指数，反映「中国当局已显著改善固定收益市场的基建设施，以便国际投资者参与这个市场。相关的市场改进措施包括：提升债券二级市场的流动性；改善外汇市场的结构；以及开发全球结算和托管程序。」

根据现时的预计，中国最终占世界政府债券指数的比重约为5.7%；与德国政府债券相若，并高于英国金边债券。

早在中国债券开始纳入主流市场指数之前，外资准入渠道改善已令更多海外投资者投资于这个资产类别。多国央行及主权财富基金展开了这股趋势，但目前中国债券的投资者基础已经扩大至广泛的全球资产管理业。这有赖市场准入渠道改善，以及投资者逐渐发现持有这个资产类别能够为投资组合带来的潜在优势。

截至2020年第一季末，外资占在岸人民币债券市场的比重为2.3万亿元人民币 (3,280亿美元)，高于五年前的金额三倍以上。

尽管投资比重正在增加，但中国占全球债券投资组合的配置比重仍然相对较低，随着国际投资者进一步认识及放心投资于这个资产类别，我们认为中国债券占其投资组合的比重将会上升。因此，我们预期将来会出现固定收益资金流入中国的结构性现象。