Sumitomo Mitsui DS Asset Management is set to debut its first private investment trust for Chinese equities next month, targeting local institutional investors and high-net-worth individuals. The fund will actively manage investments in yuan-denominated A shares listed in mainland China, employing instruments like index futures to buffer against market volatility.
Last week, the company secured approval from the Asset Management Association of China to establish the fund. This move positions Sumitomo Mitsui DS as the second Japanese brokerage to launch a private fund registered in China, following Nomura Asset Management.
Despite a recent economic slowdown prompting investors to pivot from Chinese stocks to other markets, such as Japanese equities, Sumitomo Mitsui DS remains optimistic about the long-term growth potential of China’s equity market. The firm anticipates a rise in the number of high-net-worth individuals driving future investment growth.
Since transforming its Shanghai representative office into a fully operational subsidiary in 2022, Sumitomo Mitsui DS has expanded its staff and operations. The company aims to grow its client assets in China to between 200 billion yen and 300 billion yen ($1.3 billion to $2 billion) over the next decade.
Future plans include launching additional trusts for Chinese investors, focusing on a broader range of assets. This strategic expansion underscores Sumitomo Mitsui DS’s commitment to strengthening its presence in the Chinese market and catering to its evolving investment landscape.
