CSOP Asset Management is not a household name in the U.S., but the Hong Kong-based asset manager could change that with today’s launch of its first U.S-listed exchange traded fund, the CSOP FTSE China A50 ETF (NYSEArca: AFTY).
The CSOP FTSE China A50 ETF is first ETF to be listed independently in the U.S. by a Chinese asset management company. Previous versions of A-shares ETFs to list in the U.S. have been partnerships between a U.S.- or Europe-based ETF issuer and a China-based asset manager. Those partnerships are pivotal to ETF issuers being able to offer U.S. funds that feature physical access to China’s A-shares because a Renminbi Qualified Foreign Institutional Investor (RQFII) meets Chinese regulatory requirements to be a foreign owner of A-shares. [A-Shares Gain a Following]
“CSOP was founded in 2008 as the first offshore asset manager set up by a regulated asset management company in China,” according to the firm’s web site.
The firm’s first U.S.-listed ETF enters a growing segment of the ETF offering U.S. investors to physical A-shares. CSOP will compete with several issuers of rival A-shares ETFs, notably Deutsche Asset & Wealth Management, the issuer behind the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (NYSEArca: ASHR).
ASHR, which debuted in November 2013, was the first ETF to trade in the U.S. to offer investors physical A-shares access. It is now the largest with over $1 billion in assets under management. Other competitors include the KraneShares Bosera MSCI China A-Shares ETF (NYSEArca: KBA) and the Market Vectors ChinaAMC A-Share ETF (NYSEArca: PEK). [More in Store for A-Shares Rally]
For its part, the CSOP FTSE China A50 ETF will not show up to the U.S.-listed A-shares ETF party empty handed. The listing recorded the largest initial capital investment of more than $237 million in assets and 13.96 million shares, the largest initial investment among all U.S.-listed equity ETFs since 2007, according to CSOP. That makes the new ETF already the second-largest A-shares ETF trading on a U.S. exchange.