CSOP launches China A-share ‘Star & ChiNext’ ETF on SGX

Jan 5th, 2023 | By | Category: Equities

Hong Kong-based CSOP Asset Management has launched an ETF in Singapore providing exposure to innovative Chinese A-share companies with high growth potential.

CSOP launches Chinese A-share ‘Star & ChiNext’ ETF on SGX

The ETF targets Chinese A-share companies operating in ‘next generation’ industries.

The CSOP CSI Star & ChiNext 50 Index ETF (SCY SP) has been listed on Singapore Exchange in Singapore dollars.

The fund is linked to the CSI STAR & ChiNext 50 Index which selects its constituents from a universe of large-cap companies listed on the STAR and ChiNext markets.

The STAR and ChiNext markets are Nasdaq-style Boards of the Shanghai and Shenzhen stock exchanges, respectively, which aim to attract innovative and fast-growing enterprises, especially high-tech firms, by offering less stringent listing standards compared to the exchanges’ Main and SME Boards.

The index screens the initial universe for firms operating in ‘next generation’ industries including information technology, high-end equipment manufacturing, new materials, biological innovation, sustainable energy automobiles, new energy production, energy conservation, environmental protection, and digital creative, among others.

The index selects the 50 largest eligible constituents and weights them by market capitalization.

As of the end of November 2022, the index was dominated by industrial companies which accounted for nearly half (46.6%) of the total weight with significant exposure also to firms from the information technology (27.1%) and healthcare (23.3%) sectors.

Notable positions included CATL (10.0%), Mindray Medical (7.4%), Inovance Technology (6.4%), Sungrow (5.9%), and EVE Lithium Energy (5.3%).

According to CSOP, the ETF has a current management fee of 0.89% while its ongoing charges over a year are estimated to be 2.70%.

The fund is the second ETF listed in Singapore via the ETF link collaboration between Singapore Exchange and Shenzhen Stock Exchange. The ETF link, which was announced in 2021, aims to promote the ETF markets in Shenzhen and Singapore through the listing of so-called ‘feeder’ ETFs which link locally listed ETFs to ones listed on the other exchange. The new ETF gains its exposure by investing in the Shenzhen-listed China Southern CSI STAR and CHINEXT 50 ETF.

The first ETF to debut on Singapore Exchange through the ETF link was the UOBAM Ping An ChiNext ETF which came to market in Singapore in November 2022. The fund provides exposure to the largest Chinese A-share companies trading on ChiNext.

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