The latest news in investment offerings, financial products and other services relative to wealth advisors and their clients.

Robeco
Netherlands-based sustainable asset manager Robeco has just launched its Emerging Market ex-China Equities fund, which is classified under Article 8 of the EU’s Sustainable Finance Disclosure Regulation (SFDR).

This SFDR Article 8 fund allows investors to calibrate its China exposure separately, the firm said in a statement. Given China’s market size, its current dominance in emerging markets (EM) portfolios, and specific factors such as geopolitics and regulatory policy could affect performance. Robeco has consequently chosen this setup, saying it offers investors a more balanced exposure to EM opportunities.

The firm believes that the strategy enables investors to carve out China from their EM allocation and gain more exposure to smaller EM economies under-represented in the main index, such as Korea, Taiwan and Brazil. It invests in over 1,100 companies, in high-growth sectors such as fintech and semiconductors. The fund consists of a diversified portfolio of 60 to 80 stocks, selected with a value tilt, targeting valuations with potential earnings' upside. It offers a blend of quantitative research for stock selection, with the aim of achieving a better return than the index, the firm added.

The dominance of China in portfolios has increased over the years. In 2000, Chinese stocks comprised about 5 per cent of the index, which at the time was dominated by the likes of South Korea, South Africa, Brazil, Mexico and Taiwan, the firm said. But much has changed since then. China’s economy has grown by a factor of 15, becoming the world’s second largest economy. By comparison, South Korea’s economy roughly tripled over the same period, while South Africa’s and Taiwan’s barely doubled.

BlackRock
BlackRock has just launched two European-listed exchange traded funds (ETFs) – iSharesWorld Equity High Income UCITS ETF (WINC) and iShares US Equity High Income UCITS ETF (INCU).

Many investors, who are looking for high levels of income as well as capital appreciation, want to access these themes through the wrapper of their choice, the firm said in a statement. WINC and INCU are additions to the iShares ETF offering which aims to generate high income by managing a diversified basket of primarily dividend paying stocks and by selling index call options.

Both funds are designed to provide investors with a differentiated strategy which seeks to generate the outcome of income and capital growth with lower volatility than their reference benchmarks. They aim to forecast which companies are likely to outperform or underperform the market, the firm added.

The iShares World Equity High Income UCITS ETF (WINC) and the iShares US Equity High Income UCITS ETF (INCU) are listed on Euronext Amsterdam and Xetra. The TER for each fund is 0.35 per cent.