Fuguo Fund's wholly-owned subsidiary, Fuguo Asset Management (Hong Kong) Limited, referred to as Fuguo Hong Kong, has been appointed as an investment advisor by Galaxy International Securities (Singapore) Pte. Ltd., known as Galaxy International. This partnership supports an actively managed equity ETF focusing on local mid-to-small cap stocks in Singapore.

The product has commenced its offering and is expected to be listed on the mainboard of the Singapore Exchange (SGX). It targets a market segment that heavily relies on active stock selection.

The ETF benchmarks the SGX iEdge Singapore Next 50 Index, concentrating on Singapore's mid-to-small cap sector. This index includes the 50 largest listed companies by market capitalization beyond the 30 components of the FTSE Straits Times Index (STI), totaling approximately S$110 billion. This represents a significant investment area historically under-researched.

According to data cited by Galaxy International, as of June 30, 2026, the median analyst coverage for Next 50 constituents was only six firms, less than half of the 16 for STI components. Eleven of these stocks had coverage by three or fewer analysts. This lack of research directly leads to reduced pricing efficiency and wider return dispersion. Over the past 12 months, the best-performing stock in the index achieved a total return exceeding 160%, while the worst was around -36%, making the overall dispersion nearly three times that of the STI.

In a market with insufficient research and significant return divergence, passive index replication means forgoing differentiation, highlighting the value of active stock selection. This is the core reason for the product's active management approach rather than passive tracking. James Ong, Head of Asset Management at Galaxy International Group, stated that most Singapore investment portfolios are concentrated in blue-chip stocks, meaning investors hold only a small part of the market. They miss the broader industry and growth opportunities represented by the Next 50, and disciplined active management may be an effective way to participate in this segment.

The stock selection for this product is supported by a six-factor model developed by Fuguo Hong Kong's quantitative team. This model scores and ranks each target across six dimensions: valuation, growth, earnings surprises, analyst sentiment, earnings quality, and market factors. From this, a portfolio of 30-50 stocks is constructed and adjusted monthly.

Founded in 2009, Fuguo's quantitative team is one of the earliest in China's public fund industry. In recent years, it has continuously iterated AI quantitative research on a fundamental multi-factor system, building a dual-driven model architecture combining fundamentals and AI. Fuguo Hong Kong leverages this system to provide investment advisory services to overseas partners.

Li Xiaowei, Chief Investment Officer at Fuguo Fund, commented: "Our quantitative investment team has refined this multi-factor framework over more than 16 years of market cycles. We believe these proven principles have cross-market applicability. This collaboration with Galaxy International allows us to bring institutional-grade quantitative research to a broader investor base, reflecting our long-term commitment to Asian capital markets."

This shift moves from "exporting Chinese asset exposure" to "exporting Chinese investment capabilities." Unlike previous models focusing on China-related assets, this partnership focuses not on the broad concept of "China market" but on a cross-market applicable investment methodology. For example, with active ETFs versus passive ETFs, the thresholds differ. Providing an index tool requires tracking accuracy and operational efficiency, while placing an active model at the product's core requires overseas partners to assess the stability of the research team, risk control system, strategy capacity, and consistency across cycles.

For Chinese asset management institutions, the yardstick for internationalization is evolving. Establishing overseas subsidiaries and issuing offshore funds are just the starting points. A more significant test is whether, after thorough evaluation, overseas financial institutions are willing to adopt research capabilities as the product's core. Carol Fong, CEO of Galaxy International Group, noted that a resurgence of interest in Singapore's market requires broader investor participation, including retail investors in sectors beyond blue chips, while institutional capital has already positioned itself. Galaxy International has served Singapore retail investors for decades and has a responsibility to develop products that broaden market investment channels.