With China’s domestic exchange-traded funds industry growing at breakneck speed and its Mainland equity market steadily opening up to foreign investors, innovation surrounding Chinese indices has been a major theme so far this year. European index provider Stoxx, which earlier this year launched the market-capitalisation-weighted Stoxx China A 50 Index, has continued this theme with the introduction of the Stoxx China A 50 Equal Weight Index.
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China’s first cross-border exchange-traded fund (ETF), the Guotai Nasdaq-100 ETF (513100), has begun trading on the Shanghai Stock Exchange. The fund is linked to the Nasdaq-100 Index and is sponsored by Guotai Asset Management, one of the longest-established fund management companies in China. The fund’s launch represents a significant development for the burgeoning exchange-traded product market in China.
Indexing investment giant Vanguard has launched its intermediary business in Hong Kong and revealed plans to expand access to its products to investors throughout Asia. The firm is also set to announce the listing of its first locally domiciled exchange-traded fund (ETF), the Vanguard FTSE Asia ex-Japan Index ETF, in Hong Kong. Vanguard is the third-largest global ETF provider, with $280 billion in ETF assets.
Bank of China (HK) and FTSE Group have announced a partnership to develop a new suite of indices designed to measure the performance of Renminbi (RMB)-denominated bonds issued in offshore jurisdictions. The indices will be structured to help global investors to better capture the opportunities in the so-called ‘dim sum’ market and to provide an industry standard benchmark to meet increasing international demand for access to RMB-linked fixed income products, particularly exchange-traded funds.
Guotai AMC has revealed plans to launch China’s first cross-border exchange-traded fund (ETF). To be listed on the Shanghai Stock Exchange, the Guotai Nasdaq-100 ETF (513100) will enable Mainland China-based investors to physically track the technology-heavy Nasdaq-100 Index. The emergence of cross-border ETFs on local stock markets such as the Shanghai and Shenzhen exchanges will significantly enhance the trading efficiency of overseas investments for Chinese investors.
Risk specialists Axioma and index provider China Securities Index (CSI) are to collaborate on a new series of smart beta strategy indices on China’s A-share market. The indices, which will be distributed by CSI, will be based on the popular CSI 300 index.
Stoxx has launched the Stoxx China A 50 Index, a blue-chip index that comprises 50 of the largest Chinese A-shares. The index follows Stoxx’s established blue-chip index methodology and is derived from the parent Stoxx China A Total Market Index, an index covering approximately 95% of the investable stock universe of Chinese A-Shares.
Stoxx has announced that its flagship index, the Euro Stoxx 50, has been licensed to China Universal to serve as the basis for an exchange-traded fund (ETF). Shanghai-based China Universal is one of the fastest-growing asset managers in China, with assets under management of $9 billion. Although the Euro Stoxx 50 is one of the most widely tracked indices – there are currently 21 ETFs linked to the index globally – this is the first time that the blue-chip eurozone benchmark has been licensed to underlie an ETF in China.
China’s leaders have recognised the problems associated with the current export-led economy and are implementing measures to boost consumer consumption. Wen Jiabao, the country’s premier, vowed: “We will work hard to expand consumer demand…We will improve policies that encourage consumption.” Chinese consumer companies look best placed to grab the largest share of consumption growth. Investors looking to target this sector can do so via the db X-trackers CSI 300 Consumer Discretionary UCITS ETF and the Global X China Consumer ETF.
db X-trackers, the exchange-traded fund (ETF) platform of Deutsche Bank, has cross-listed five Chinese equity sector ETFs on Frankfurt’s Deutsche Börse. The funds, which already maintain listings on the Hong Kong stock exchange, provide European investors with targeted exposure to key segments of China’s CSI 300 Index. The sectors covered are banks, consumer discretionary, energy, health care and real estate. Together, these sectors constitute approximately 50% of the entire broad-market CSI 300.