China Southern launches ETF on HSCEI

Mar 16th, 2018 | By | Category: Equities

China Southern Asset Management has launched a new ETF on the Shenzen Stock Exchange. The ETF tracks the Hang Seng China Enterprises Index (HSCEI).

China Southern Asset Management launches ETF on HSCEI

China Southern Asset Management launches ETF on HSCEI

The HSCEI is formed of 50 equity securities and offers broad exposure to large-cap Chinese companies listed on the Hong Kong Stock Exchange.

The constituent securities are split between 40 H-shares and a total of 10 Red-chips and P-chips. These share classes differ with respect to where companies are incorporated.

H-shares are shares in companies incorporated in mainland China, while Red-chip and P-chip companies are both formed outside mainland China. P-chip companies are incorporated specifically in the Cayman Islands, Bermuda and the British Virgin Islands, and are private sector businesses operating in mainland China.

The index is heavily weighted to the financial sector with 21 of the 50 companies, representing a combined 72.9% of its total market cap as of 28 February 2018. Financial stocks also make up the top five constituent weightings with CCB (11.2%), Bank of China (10.5%), ICBC (10.4%), Ping An (9.7%) and China Life (5.4%) collectively taking almost half of index.

Energy stocks constitute the second largest sector weighting with a combined 10.9% spread over three companies, the largest of which is Sinopec Corp with 5.0%.

The index has delivered strong performance recently, returning 20.2% year on year as of 28 February 2018. This growth has outpaced the MSCI All Country World Index, which has returned 18.8% over the same period.

Assets under management in ETPs linked to Hang Seng indices now stand at over $30 billion.

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