Source and CSOP file physical China A-share ETF with SEC

Jan 29th, 2014 | By | Category: Equities

Source, a London-based provider of exchange-traded products (ETPs), and CSOP Asset Management, a Hong Kong-based asset manager, have filed with the US Securities & Exchange Commission (SEC) to launch an ETF providing physical exposure to China “A-shares”.

The proposed ETF will provide physical exposure to China A-shares, namely shares of listed mainland Chinese companies traded on mainland Chinese exchanges and denominated in renminbi.

The proposed ETF will provide physical exposure to China A-shares, namely shares of listed mainland Chinese companies traded on mainland Chinese exchanges and denominated in renminbi.

The new ETF will aim to track the performance of the FTSE China A50 Index, which comprises the top 50 companies in mainland China. This index is a recognised benchmark for A-shares and has been calculated by FTSE since 2003.

Peter Thompson, Chief Strategy Office at Source, commented: “The FTSE China A50 Index has established itself as the leading reference index for China exposure globally. We are pleased to be filing with the SEC for a fund tracking the same highly sought after benchmark.”

The intention of Source and CSOP to enter the US ETF market follows a similar co-operation in Europe, where earlier this month the two firms teamed up to launch the CSOP Source FTSE China A50 UCITS ETF (CHNP). This fund, which was listed on the London Stock Exchange, now has more than $230 million in assets.

The two partners are strong players in their respective fields. Since its launch in April 2009, Source has accumulated more than $15 billion in total assets and its products have traded over $510 billion. CSOP was the first Hong Kong-based asset manager to be established by a regulated Chinese asset manager. CSOP has delivered a number of products in Hong Kong to reference Chinese A-shares market.

The A-shares market is widely viewed as the most authentic Chinese equity market.  A-shares are shares of mainland Chinese companies, traded on mainland Chinese exchanges and denominated in Chinese renminbi (RMB). The market represents over 4% of the global equity market but has been difficult to access, particularly for smaller investors.

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