China prepares to launch first commodity ETFs

Sep 9th, 2019 | By | Category: Commodities

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China’s financial markets regulator – the China Securities Regulatory Commission (CSRC) – has approved the launch of the country’s first commodity ETFs.

china commodities etfs

China Securities Regulatory Commission has approved the launch of China’s first commodity ETFs.

CSRC has given the green light for the listing of three new funds which will provide exposure to energy, metal, and agricultural futures traded on Chinese commodity exchanges.

The Dacheng Nonferrous Metals Futures ETF will be managed by Dacheng Fund Management and track the Shanghai Futures Exchange Non-ferrous Metals Futures Index. The index provides exposure to a basket of base metals futures traded on Shanghai Futures Exchange.

The Jianxin Yisheng ZCE Energy and Chemical Futures ETF will be managed by CCB Principal Asset Management and track the Esunny Zhengzhou Commodity Exchange Energy & Chemical Index. The index provides exposure to coal, purified terephthalic acid, methanol, and glass futures contracts traded on Zhengzhou Commodity Exchange.

The Huaxia Feed Soymeal Futures ETF will be managed by China Asset Management and track the Dalian Commodity Exchange Soybean Meal Futures Index. The index provides exposure to soymeal futures traded on Dalian Commodity Exchange.

All three ETFs are set to list on the Shenzhen Stock Exchange although no launch dates have yet been set.

The introduction of commodity ETFs in China will provide investors with convenient and transparent vehicle through which to access an asset class that has historically provided important portfolio diversification benefits.

It also expected that the funds will stimulate new flows into China’s domestic commodity markets, helping to boost liquidity and stabilise the prices of futures contracts.

Looking beyond these three initial products, a number of other asset managers have filed regulatory documents with CSRC to launch commodity ETFs, including a gold ETF.

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