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Principal Global Investors approved for USD150m QFII quota

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Principal Global Investors has been approved for a USD150m quota as a Qualified Foreign Institutional Investor (QFII) by China’s State Administration of Foreign Exchange.



Principal Global Investors was awarded the QFII designation in January 2012. The USD150m quota can be directly invested into the local China A-share markets.

Jim McCaughan (pictured), chief executive of Principal Global Investors, says: “Being able to invest directly in the China A-share markets is a valuable and highly sought-after privilege. We are pleased to participate in one of the fastest-growing economies in the world. Despite the recent slowdown in growth, China continues to be an area of increasing focus and opportunity for sophisticated institutional investors.”

Principal Global Investors’ China strategy is supported through its regional headquarters in Singapore, a regional office in Hong Kong, the global headquarters in Des Moines, Iowa, and coordinated through a representative office in Beijing. The investment team responsible for the capability is located in Hong Kong, Singapore and the US.

The QFII license and quota represent the next step in The Principal’s ongoing involvement in China, an effort that dates back to 1994. In 2005, The Principal established a joint venture with China Construction Bank, the second largest commercial bank in China. The joint venture, China Construction Bank-Principal Asset Management (CCB-PAM), manages both equity and fixed income products for local clients.

Principal Global Investors will engage CCB-PAM as a consultant in order to benefit from CCB-PAM’s knowledge of evolving macro-economic news and political events, and the potential impact on the capital markets. This engagement does not impact the investment decision-making process of either firm.

Tony Chu, portfolio manager with Principal Global Investors, says: “For those investors fortunate enough to access them, the China A-share markets currently offer one of the most attractive investing opportunities in the world. Even with the recent deceleration, China’s GDP growth is still among the strongest in the world, and is now showing signs of stabilizing. In fact, temporary weakness should be viewed as a good opportunity for long-term oriented institutional investors to enter the China A-share markets. The A-share markets also provide a diverse and rich opportunity set not available to most global investors through the Hong Kong and offshore listed markets.”

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