ETF Securities, a London-headquartered provider of exchange-traded funds (ETFs), and E Fund Management (HK), a Hong Kong-based asset manager, have joined forces for the proposed launch of an ETF linked to the MSCI China A Index.

Matt Johnson, Head of Distribution EMEA, ETF Securities.

The MSCI China A Index captures large and mid cap representation across China securities listed on the Shanghai and Shenzhen exchanges.

Matt Johnson, Head of Distribution EMEA at ETF Securities, commented: “We are delighted to be able to license the MSCI China A Index. We expect our product to be the first UCITS ETF listed in London tracking the MSCI China A Index which provides better diversification and sectorial coverage than other indices we have reviewed.”

Ko Tseng, Managing Director, E Fund Management (HK), said: “The attractive China A shares market is gaining much ground with global investors.  E Fund is pleased to be working on a new product for Europe with ETF Securities that, once launched, will give a clear measure and representation of this segment.”

Deborah Yang, Managing Director and Head of the MSCI Index Business in EMEA and India, added: “We are pleased to welcome ETF Securities and E Fund to our growing list of clients who choose to license MSCI indices for their products in Europe, reinforcing MSCI’s position as the benchmark of choice for the ETF market. A significant hurdle for international investors is starting to come down as the opening of the China domestic equity market accelerates, and the MSCI China A Index provides investors with an effective way to capture the diverse and dynamic opportunities of the A share market.”

Existing London-listed physical China A share ETFs include the CSOP Source FTSE China A50 UCITS ETF (CHNP), which is linked to the FTSE China A50 Index, and the db x-trackers Harvest CSI300 Index UCITS ETF (DR) (ASHR), which is linked to the CSI 300. The underlying indices to both these ETFs hold fewer constituents and are less diversified than the MSCI China A Index.