BlackRock has launched a new China equity ETF in Europe.
BlackRock now offers three Chinese equity ETFs in Europe.
The iShares MSCI China UCITS ETF is linked to the MSCI China Index which provides broad exposure to multiple Chinese share classes.
The index captures large- and mid-cap representation across China H shares, B shares, Red chips, P chips, and foreign listings.
With 495 constituents, the index covers about 85% of the China equity universe.
Large-cap China A shares are currently represented at 10% of their float-adjusted market capitalization.
The inclusion factor of large-cap A shares in the index is expected to increase to 20% in two steps coinciding with MSCI’s August 2019 quarterly review and November 2019 semi-annual review. On completion of the two stages, China A mid-cap shares, including eligible ChiNext shares, will also be included at a 20% inclusion factor.
The majority of the index’s exposure is concentrated within three sectors: communication services (24.2%), financials (23.0%), and consumer discretionary (22.5%). The next largest sector exposure is real estate (5.7%).
Tencent and Alibaba both hold significant weights in the index at 14.6% and 13.1%, respectively, followed by China Construction Bank (4.7%) and Ping An Insurance (3.8%).
The fund has been listed on Euronext Amsterdam and Deutsche Börse Xetra under the tickers ICHN NA and ICGA GY, respectively. It comes with an expense ratio of 0.40%.
There are three other ETFs currently listed in Europe that track the MSCI China Index, offered by DWS, HSBC, and Lyxor.
The largest is the $1.1 billion Xtrackers MSCI China Index UCITS ETF (XCX6 LN) which comes with an expense ratio of 0.65%, while the cheapest is the Lyxor MSCI China UCITS ETF (LCCN LN) which costs 0.30% and has $100 million AUM.
BlackRock offers a further two China equity ETFs in Europe.
The iShares MSCI China A UCITS ETF (CNYA LN) tracks the MSCI China A Inclusion Index which is designed to track the progressive partial inclusion of China A shares in the MSCI Emerging Markets Index. It has $600m AUM and comes with an expense ratio of 0.40%.
The second fund is the iShares China Large Cap UCITS ETF (FXC LN) which tracks the FTSE China 50 Index, a reference for the largest 50 China A share companies. It has $650m AUM and an expense ratio of 0.74%.