ETF Securities launches physical MSCI China A Share ETF

May 19th, 2014 | By | Category: Equities

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ETF Securities, a London-headquartered provider of exchange-traded funds, has partnered with E Fund Management (HK), a Hong Kong-based asset manager, to launch the ETFS-E Fund MSCI China A GO UCITS ETF (CASH).

ETF Securities launches physical MSCI China A Share ETF on London Stock Exchange, Deutsche Börse and NYSE Euronext Amsterdam

Matt Johnson, Head of Distribution EMEA, ETF Securities.

Listed on the London Stock Exchange, Deutsche Börse and NYSE Euronext Amsterdam, the fund is Europe’s first physical ETF to track the MSCI China A Index, an index capturing large and mid-cap representation of renminbi-denominated securities listed on the Shanghai and Shenzhen stock exchanges.

Commenting on the launch, Matt Johnson, Head of Distribution EMEA, ETF Securities, said: “ETFS-E Fund MSCI China A GO UCITS ETF aims to track the performance of the MSCI China A Index that comprises over 460 Chinese stocks and provides more diversified sector coverage than other China A indices which typically have a high concentration in fewer sectors and stocks. We are delighted to be working on this product with E Fund, the second largest RQFII Quota holder with approximately RMB27 billion. As one of China’s top asset managers, they have extensive experience in the industry, having previously launched China A Share ETFs in China.”

Ko Tseng, Managing Director, E Fund Management (HK), added: “The attractive China A shares market is gaining much ground with global investors. E Fund is pleased to be working with ETF Securities to launch ETFS-E Fund MSCI China A GO UCITS ETF which gives a clear measure and representation of this segment. This comprehensive and exciting new ETF marks a significant step for European investors who wish to access the opportunities provided by this market”.

Deborah Yang, Managing Director and Head of Index Business in EMEA and India, MSCI, commented: “As the opening of the China domestic equity market accelerates, investors are looking for greater access to the region and the MSCI China A Index provides a basis for passive products linked to the A shares market. We are pleased to work with ETF Securities  as  they  introduce  this  new  MSCI  index-linked  ETF  that  will  give  European investors direct access to one of the most watched equity markets.”

The launch of the fund comes at a time when China A shares, as measured by the MSCI China A Index, are close to the cheapest (in PE terms) they’ve been since the worst part of the 2008 global financial crisis. This is despite the country posting healthy economic numbers in 2013 and achieving a more sustainable growth trajectory of around 7-8%.

ETF Securities believes that these factors, combined with a government committed to further economic reform and financial liberalisation and an aggregate equity market capitalisation still low relative to the size and importance of the economy, make China A shares an attractive long-term proposition for investors.

The ETF has a total expense ratio of 0.88% and is the first to be launched on ETF Securities’ Canvas platform since it was introduced in September 2013. Further products are expected to be launched on the platform in 2014.

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