Deutsche Bank and PineBridge Investments have gained regulatory approval to launch the first Chinese-focused exchange traded funds that track both Shanghai and Shenzhen-listed shares.
“Institutional investors such as sovereign wealth funds prefer ETFs because they’re more liquid than other passive fund products,” said Howhow Zhang, head of research at Shanghai-based fund consultancy Z-Ben Advisors. “The new products should appeal to foreign institutional investors who are seeking China exposure and share China’s growth.”
The ETFs have been in the regulatory process for five years. Samuel Shen and Kazunori Takada report for Reuters that Harvest Fund Management Co. and Huatai-PineBridge Fund Management Co. will launch the funds. The ETFs will track the CSI300 Index of China’s 300 biggest listed companies. [Are China ETFs in for a Hard Landing?]
Analysts are positive that these funds will give China’s growing hedge fund market much needed growth and will also encourage institutional investors and pension funds to enter into the domestic market. [China ETFs Fall On Growth Concerns]
Analysts also report that the cross-market ETFs are an introduction to a launch of planned ETFs linked to Hong Kong-listed shares, giving China cross market settlement. The new ETFs will trade on the Shangahi Bourse, reports MarketWatch. [Van Eck Adds a Small-Cap Indonesia ETF]
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.