The recent opening of the Chinese equity markets to foreign investors presents a notable investment opportunity.

At the end of 2016, China allowed, for the first time in a meaningful way, the flow of investment dollars into domestically listed Shenzhen stocks through the Shenzhen-Hong Kong Stock Connect.

The Shenzhen-Hong Kong Stock Connect is an investment channel that connects the Shenzhen Stock Exchange and the Hong Kong Stock Exchange. Under this program, investors in each market are able to trade shares on the other market using their local brokers and clearing houses.

The flow of investment dollars into domestically listed Shenzhen stocks through the Shenzhen-Hong Kong Stock Connect opens the possibility of investing in a nearly $10 trillion market.

In practice, the flow of investment dollars into domestically listed Shenzhen stocks through the Shenzhen-Hong Kong Stock Connect opens the possibility of investing in a nearly $10 trillion market. Foreign investors can now access rapidly growing parts of the Chinese economy that were not previously accessible.

These opportunities span sectors—IT, capital goods, materials, consumers, real estate, and healthcare, among others, as the chart below illustrates.

The opportunity here is vast, not just in size but in opportunity for active managers, because most of these companies are not well covered. Active managers with experience in China A shares will have a rare opportunity to seek potential winners in the most exciting growth jurisdiction available today.

 

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Please carefully consider the Funds’ investment objective, risks, charges, and expenses before investing. This and other information is contained in the Funds’ prospectus, which you may obtain by calling +1 800 742 7272. Read it carefully before you invest or send money. Investing includes the risk of loss.

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Factual information has been taken from sources we believe to be reliable, but its accuracy, completeness or interpretation cannot be guaranteed. Investments are subject to market risk. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be interpreted as investment advice, as an offer or solicitation, nor as the purchase or sale of any financial instrument. Statements concerning financial market trends are based on current market conditions, which will fluctuate.

William Blair does not provide legal or tax advice. Please consult your tax and/or legal counsel for specific tax questions and concerns.

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Copyright © 2018 William Blair & Company, L.L.C. "William Blair” is a registered trademark of William Blair & Company, L.L.C. No part of this material may be reproduced in any form, or referred to in any other publication, without express written consent.

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Please carefully consider the Funds’ investment objective, risks, charges, and expenses before investing. This and other information is contained in the Funds’ prospectus, which you may obtain by calling +1 800 742 7272. Read it carefully before you invest or send money. Investing includes the risk of loss.

Any statements or opinions expressed are those of the author as of the date of publication, are subject to change without notice as economic and markets conditions dictate, and may not reflect the opinions of other investment teams within William Blair Investment Management, LLC or the Investment Management Division of William Blair & Company, L.L.C.

This content is for informational and educational purposes only and not intended as investment advice or a recommendation to buy or sell any security. Investment advice and recommendations can be provided only after careful consideration of an investor’s objectives, guidelines, and restrictions.

Factual information has been taken from sources we believe to be reliable, but its accuracy, completeness or interpretation cannot be guaranteed. Investments are subject to market risk. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be interpreted as investment advice, as an offer or solicitation, nor as the purchase or sale of any financial instrument. Statements concerning financial market trends are based on current market conditions, which will fluctuate.

William Blair does not provide legal or tax advice. Please consult your tax and/or legal counsel for specific tax questions and concerns.

Distributed by William Blair & Company, L.L.C., member FINRA/SIPC.

Copyright © 2018 William Blair & Company, L.L.C. "William Blair” is a registered trademark of William Blair & Company, L.L.C. No part of this material may be reproduced in any form, or referred to in any other publication, without express written consent.

Statement of Financial Condition | NMS Rule 605 & 606 | Business Continuity Plan | UK Stewardship Code
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