Interview with David Zhang, CIO & Deputy CEO, E Fund Management (HK) Limited. Christian Salow (altii) met David at the annual ETF Securities Conference 2015 in Frankfurt a.M., Germany.
altii: Hello and what a pleasure meeting you again. What brings you over to Germany?
David: Together with ETF Securities we launched last year one of the very first China A shares ETFs. Now I am here to meet investors and share our view of the market and explain what is going on in the Chinese market.
altii: Then please share your view with altii.
David: As a Chinese Asset Manager our expertise is obviously in China. We think that A shares even after a rally of 50% in the last year have a pretty good chance to continue to produce good returns. We and some other asset managers and local area hedge funds believe that the market has a 20% upside with a volatility that is higher than before.
altii: How can local investors from Germany, Austria and Switzerland participate in such an attractive looking opportunity?
David: That is the right question. In the past it was not so easy for foreign investors to enter the Chinese market. With our ETF launch last year using quota programs called RQFII (renminbi qualified foreign institutional investor scheme) the situation is much more relaxed. The investor simply buys our ETF through all major exchanges world wide and invests directly into the China A share market. With the ETF Securities product, the investor does not have to worry about getting own quotas for RQFIIs which actually could be a complex and time consuming circumstance. Buying our China ETF makes it as simple as buying any other stock as example.
altii: Coming back to your foreign customer base. You have client visits over here. What is the expectation of the investors and potential candidates about the market in China?
David: We are actually facing a bifurcated investor base. There are a lot of investors who are bullish and made already good revenues in the market. On the other hand we have some investors who are more interested but need more education about the scenery. Some people are worried about a potential slow down, debt issues or the discussion about the shadow banking system. We are forward looking decision makers and we try to evaluate the market opportunities that are upcoming to make profits. We look carefully into the PBoC (People's Bank of China) policy as an example. This policy is supporting the share market. We continue to work with our partners and meet with investors to explain what is going on and find good opportunities for them.
altii: You touched it already a little bit. Are the investors from the western hemisphere really understanding what is going on in the Chinese market?
David: Yes they do but it always help to partner up with experts like us and analyse the market together. Well, if I try to understand the US, the European or the German stock market I need help. This is pretty normal. Every investor is well advised to think globally and to use the global markets to diversify risks.
altii: Thank you David. We wish you good client visits.
David ZHANG holds a Masters in Financial Engineering from UC Berkeley in 2001. Currently, he is the CIO and Deputy CEO of E Fund Management (Hong Kong) Co., Limited. Prior to that, he was portfolio manager and Deputy CEO of Bosera Asset Management (International) Co., Ltd, DB Advisors in NYC, Citi Fixed Income Alternatives in New York and PIMCO's Portfolio Management Department.
E Fund HK is a wholly owned subsidiary of E Fund. Founded in April 2001, E Fund manages assets close to RMB 430 billion (over US$68 billion). Based in Guangzhou, E Fund also has offices in Beijing and Shanghai. E Fund has grown tremendously and ascended to the top industry performance rankings due to our trustworthy, disciplined management style, value investment philosophy and fundamental research-driven investment approach. E Fund has received numerous industry awards and accolades in recent years.