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Shenzhen-headquartered Bosera Asset Management, one of the longest-established fund management companies in China, has launched the first ever exchange-traded fund (ETF) listed in Mainland China to be linked to the S&P 500 Index.
The new ETF, which has its primary listing on the Shanghai Stock Exchange, is Bosera’s fifth ETF and its first to offer exposure to non-China markets.
The ETF is understood to be overseen by Charles H. Wang, E Fund Management’s former Hong Kong chief executive, who joined Bosera in January this year as chief investment officer for ETF and quantitative investments.
By offering access to an overseas market, the launch represents an acceleration of the development of the ETF market in Mainland China and heralds the emergence of a larger and more diversified range of ETF-based investment opportunities for Chinese investors.
The ETF industry in Mainland China has already enjoyed significant growth in recent years and total assets under management of ETFs listed on the Shanghai and Shenzhen stock exchange now stand at around 150 billion Yuan (about $25 billion), as of the third quarter of 2013. There are now close to 80 ETFs available in the market.
This new ETF enhances the offering further, enabling Chinese investors to express their views on one of the world’s most important indices in one simple trade.
Owned and calculated by index giant S&P Dow Jones Indices, the S&P 500 measures the performance of 500 leading large-cap companies listed in the US across various industries of the US economy. It captures approximately 80% coverage of available market capitalization.
First introduced in 1957, the index has over $5.74 trillion benchmarked to it, with passive index-linked assets (including ETFs) comprising approximately $1.57 trillion of this total as of December 31, 2012. The index is also the basis for the world’s largest ETF, the NYSE Arca-listed SPDR S&P 500 ETF (SPY), which has approximately $160 billion in assets under management.
Alex Matturri, CEO of S&P Dow Jones Indices, said: “S&P Dow Jones Indices is excited to be at the forefront of an evolving and robust financial market in China. China is of great strategic importance to S&P Dow Jones Indices and our relationship with Bosera Asset Management is another example of our commitment to helping Chinese investors diversify their portfolios internationally and across a new range of cost efficient and liquid products. We look forward to supporting more innovation in China based on our index offerings.”
The licensing of the index to Bosera is a further mark of S&P Dow Jones’ ambitions to grow its business in Asia.
At the time of the initial licensing of the index back in March 2010, Tom Schiller, the then executive managing director of S&P’s Asia Pacific business, said: “China, as well as all of Asia Pacific, is of strategic importance to Standard & Poor’s as we continue to aggressively grow our international index business.”
Bosera’s latest ETF is among a number of international market ETFs set to make their debut in China in coming months. Others are understood to include an ETF from Harvest Fund Management tracking the Dow Jones Industrial Average index, an ETF from HuaAn Funds tracking the FTSE 100 Index, and an ETF from Fortune SG Fund Management tracking the TOPIX Core 30 Index.