Quantifeed launches Belt and Road model portfolio


Gaudi Schneider

Leading provider of B2B digital wealth management solutions Quantifeed has announced today the launch of its Belt and Road model portfolio. The portfolio aims to capture the growth opportunity of the multi-year Belt and Road Initiative (BRI) led by China to build a modern version of the ancient Silk Road.

The 21st century form of the Silk Road comprises land and maritime trade routes connecting China with Central Asia, South East Asia, Australia and New Zealand, the Middle East, Africa and Europe. This initiative involves the construction of ports, warehouses, and connections to overland transport in strategic locations, and the construction and upgrading of rail-networks. The overall infrastructure investment for the BRI is estimated to be as high as US$900 billion, of which only a fraction has been pledged so far.

Quantifeed’s model portfolio consists of a selection of Chinese companies that will directly benefit from the BRI. This includes large businesses in the areas of infrastructure development, transportation infrastructure construction, non-residential building construction, and renewable energy development and distribution.

In addition to their direct involvement in the BRI, the rules of the portfolio require its constituents to derive a significant part of their revenue from countries other than China, have a positive return on equity (ROE), a market capitalisation over CNY 500 million and daily liquidity of CNY 50 million.

Gaudi Schneider, Senior Quantitative Strategist at Quantifeed, said: “The Strategy provides access to Chinese companies that are at the heart of this multi-year initiative. Our systematic stock selection process identifies the companies that will benefit from the Belt and Road initiative and provide investors with exposure to the likely growth associated with this theme.”

Mr Schneider explained that the weight of the stocks considered in the portfolio is inversely proportional to their volatility (inverse volatility weighted), which often results in improved performance too. The index-composition and weighting is reviewed semi-annually.

Graeme Brant, Senior Executive for Strategic Partnerships at Quantifeed, said: “The creation of the Belt and Road model portfolio is a direct response to the needs of our clients and prospects who are looking to offer engaging investing thematic alternatives to their own clients”.

“In this case specifically, we are addressing our clients’ request to make available a portfolio designed to capture the growth opportunity of what’s possibly the biggest macroeconomic story of the century,” he added.

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