Asset manager T.Rowe Price hoping to lure more HK retail investors with range of new funds

Nasdaq-listed firm saw its assets under management rise to US$812.9 billion by the end of September, up 12 per cent year on year

PUBLISHED : Tuesday, 08 November, 2016, 1:23pm
UPDATED : Tuesday, 08 November, 2016, 1:23pm

T.Rowe Price, the Baltimore-based global investment management organisation, is accelerating the growth of its intermediary business, on top of its institutional clients, in an effort to attract more retail investors.

The asset manager, ranked 26th globally by assets under management at the end of March, registered five equity funds this year with Hong Kong’s Securities and Futures Commission (SFC), marking its first batch of locally domiciled funds in north Asia, excluding Japan.

Elsie Chan, head of Asian intermediary sales at T.Rowe Price, said a number of global private banks have already agreed to add them to their offerings.

The investment house is to submit another five products to the Hong Kong regulator, mainly fixed-income funds originally domiciled in Luxembourg, as it prepares to expand too into private and retail banking, and insurance activities.

Asset managers must get SFC approval to market funds to retail investors through retail banks and insurance companies in the city.

It’s our long-term goal, to cater for a larger audience. We’ve been having lots of discussions with insurers and retail banks. Right now we want to focus on private banks as our intermediary team is relatively new
Elsie Chan, head of Asia intermediary sales, T.Rowe Price

“It’s our long-term goal, to cater for a larger audience. We’ve been having lots of discussions with insurers and retail banks. Right now we want to focus on private banks as our intermediary team is relatively new,” Chan said.

Founded in 1937, the fund house first entered Hong Kong in 1987 and now has 80 staff in the city, but it has been relatively low-key in the region comparing with industry peers such as Invesco and Legg Mason.

“We do realise that in the past we dealt with more institutions regionally...It’s a natural step for us to now expand from dealing with just those. It’s been a carefully thought-out decision,” Chan said.

Nasdaq-listed T.Rowe saw its assets under management rise to US$812.9 billion by the end of September, up 12 per cent year on year, with fixed-income and money-market funds absorbing the most inflows globally.

Chan said equity funds have historically been the company’s oldest class of investment, making those easier to gain approval from the SFC.

Despite the rise of more passive management strategies being adopted by many of its peers amid the recent global uncertainties, the asset manager still believes long-term returns can be achieved from active management.

“The new funds launched invest in emerging market stocks, European equities, global equities, US large-cap growth equities, and there is a global technology fund, which has been receiving the most attention from the industry,” Chan said.

She said the tech fund is considered more “global” than other similar products being offered in the city – with 25 to 30 per cent of the investment tracking non-US technology firms – and covers a wider range of companies from big names to small and medium sized firms, including those not on the list of popular benchmarks.

“Tech is an investment category that’s hard for clients to track. The sector is recorded the highest return on MSCI World Index and was full of volatility – but that’s great for active management,” Chan said.

“We find technology companies more able to enter a new market and they are less tied to economic growth when global economic growth is quite muted,” she added.

With offices in Singapore and Tokyo, T.Rowe is also keen to look for more regional opportunities outside Hong, Chan said.