The first exchange-traded fund (ETF) in Europe to offer physical exposure to China's domestic equities market has been launched on the London Stock Exchange.
Hong Kong-based CSOP Asset Management and ETF provider, Source, have launched the CSOP Source FTSE China A50 Ucits ETF, which is domiciled in Ireland.
The fund invests in A shares, or shares listed in China, of the largest 50 companies.
A shares account for 80% of total Chinese listings, the remainder being in Hong Kong (H shares) and Singapore (S Shares).
The fund is available to both retail and institutional investors and is denominated in renminbi with US dollar and pound share classes.
A shares have been difficult to access, particularly for smaller investors.
The ETF has permission to invest in A shares under China’s Renminbi Qualified Foreign Institutional Investor (RQFII) quota scheme.
CSOP is currently the largest RQFII manager of A shares globally.
Chen Ding, chief executive officer, says: “There has been high demand for our Hong Kong‐listed ETF and we expect similarly strong interest from Europe.”
CSOP’s existing FTSE China A50 ETF (2822 HK) in Hong Kong is the largest and most actively traded RQFII ETF, with assets of RMB 21 billion (€2.5 billion).
“This [London-listed] ETF represents a milestone for European investors,” says Ted Hood, chief executive of Source. “It allows all investors – not just large institutions with their own investment quotas – to invest directly in one of the world’s most important equity markets.”
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