Schroders has launched a Hong Kong-domiciled fund for investors searching for products to capture business opportunities under the Greater Bay Area’s Wealth Management Connect scheme.

The Schroder Global Multi-Asset Thematic Fund aims to provide capital growth and income opportunities with moderate volatility through a portfolio of global equities and fixed income securities that are able to benefit from exposure to three core investment themes: innovative transformation, cities and lifestyles, and environment and sustainability.

The fund is managed by Patrick Brenner and Keiko Kondo from the Asia  multi-asset team, and the team is further supported by Schroders’ specialist equity and fixed income teams. The team adopts a flexible approach in allocating among different asset classes according to market conditions, while holding decisions within an asset class would benefit from the fundamental analyses by the various specialist teams.

According to Schroders, the fund’s multi-thematic approach enables investors to tap into a broad set of opportunities across the globe, as opposed to limiting their investment options within a single theme. Adopting a multi-asset strategy in thematic investing is also a prudent way of managing risk, as it involves long-term investments in growth companies that could at times be impacted by cyclical factors.

Commenting on the theme of innovative transformation, Patrick Brenner, head of multi-asset investments, Asia, notes: “We see that many 5G-enabled technologies require the use of semiconductors, which take extreme precision to manufacture. There are only a few companies in the world that own the lithographic technology that chipmakers use to produce semiconductors. According to market estimates, 5G-related revenues overall will rise from less than US$100 billion in 2021 to US$720 billion by 2030. Hence, such companies are expected to perform well as demand for 5G increases.”

On the lifestyle theme, Brenner cites the rapid growth of e-commerce, whose revenue is expected to hit US$5.4 trillion in 2022. “Some of the world’s largest e-retailers are improving their warehouse systems with the use of artificial intelligence and robotics. Companies that specialize in supply chain automation are already benefiting from this demand, while the use of industrial robots is expected to double in the next five years, providing more opportunities from an investment perspective.”

He adds: “Awareness in renewable energy has been on the rise given the net-zero targets set out by various governments. The breadth of the related opportunities in this space goes beyond power generation and ventures out to building power grids and energy storage. By 2050, the world will need more than double the length of global power lines and transformers to enable the growth of renewables.”

Clara Law, head of Hong Kong intermediary business, says the company also wants to support Hong Kong intermediary partners in the soon-to-launch Greater Bay Area’s Wealth Management Connect initiative by creating a Hong Kong-domiciled fund that has a relatively low to medium risk profile and “provides a broad extent of global exposure that many Greater Bay Area investors may not already have access to”.