FTSE Group, one of the world’s largest providers of benchmarks for exchange traded funds, announced that China ETFs tracking FTSE indices have topped $20 billion in combined assets under management.
Among U.S.-listed China ETFs, the iShares China Large-Cap ETF (NYSEArca: FXI) tracks a FTSE index, the FTSE China 25 Index. FXI, home to $5.54 billion in assets under management, is the largest and most heavily traded China ETF listed on a U.S. exchange.
“FTSE has long been seen as the leading international index provider of Chinese indices, offering a range of products to global and domestic investors, most notably the FTSE China 25 Index and FTSE China A50 Index. These two benchmarks make up the majority of the overall $21.8 billion, with products such as the CSOP FTSE China A-50 ETF and the iShares FTSE A50 China Index ETF having recently exceeded $5 billion and $8 billion AUM respectively. Currently, more than half of all non-China domiciled global ETF assets are invested in China-linked FTSE benchmarks,” said the index provider in a statement.
After FXI, the next largest China ETF tracking a FTSE index is the $650 million Hong Kong-listed Bosera FTSE China A50 Index ETF. The London-listed CSOP Source FTSE China A50 UCITS ETF, which launched in January, also tracks the FTSE China A50 Index and has raced to $413 million in AUM.
The FTSE China A50 Index comprises the largest 50 A Share companies by full market capitalisation listed on the Shanghai and Shenzhen Stock Exchanges. Among the largest constituents of the index are Ping An Insurance, China Vanke and Gree Electric Appliances. FTSE is a leading provider of China-focused indices with ETFs tracking the FTSE China Index Series accounting for over $18 billion AUM, as at 31 December 2013, according to the index provider.
“Chinese equities represent an increasingly important part of the global equity investment landscape. We are delighted that market participants are attracted to our established track record in the region, and as China’s markets continue to become more accessible for foreign investors, we will aim to provide further transparent and flexible benchmarks,” said FTSE Group CEO Mark Makepeace in the statement.
In June, FTSE introduced a series of indices that will allow market participants to include China A-shares in global indices at a time of their choosing. The new offerings from FTSE could help global investors prepare for the possible inclusion of China’s A-shares in global benchmarks in the coming years. [FTSE Introduces China A-Shares Indices]
FXI is the only U.S.-listed China ETF tracking a FTSE index, but that could change given the index provider’s expanding presence in the world’s largest ETF market. In addition to FXI, over 100 U.S. ETFs, including massive funds such as the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO) and the Vanguard FTSE Europe ETF (NYSEArca: VGK), benchmark to FTSE indices. [FTSE Increases U.S. Index Presence]
ETF Trends editorial team contributed to this post.
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.