Although foreign investors’ access to A-shares has improved, due in part to the increasing number of ETFs on the market, China’s quota scheme is seen as hampering the inclusion of A-shares stocks in major emerging markets indices.
In a note out last week, FTSE Group, the index provider to over 100 ETFs trading in the U.S., pointed out that while the debut of stock connect went smoothly, once foreign investors hit their allotted quote of $2.1 billion, they lost access to more shares just before 2pm local time. FTSE and rival index providers, such as MSCI (NYSE: MSCI), have highlighted China’s quota system as one reason for not elevating A-shares to emerging markets status. [Stock Connect not Enough for A-Shares EM Promotion]
For its part, Deutsche Asset & Wealth Management is working to get its RQFII quota raised and its worth noting the issuer has previously been successful on that front. After creations in ASHR and ASHS were limited in September, it took about a month before those limits were lifted.
Deutsche X-trackers Harvest CSI 300 China A-Shares ETF
