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Hang Seng Indexes has launched a new equity index that provides exposure to large-cap China A-share companies with a focus on innovative businesses and emerging industries.
The index provides exposure to the 50 largest stocks list on the ChiNext board of the Shenzhen Stock Exchange.
The Hang Seng China A Innovative Enterprises Index tracks the performance of the 50 largest A-share companies by market value listed on ChiNext, a Nasdaq-style board of the Shenzhen Stock Exchange.
ChiNext aims to attract innovative and fast-growing enterprises, especially high-tech firms.
Its listing standards are less stringent than those of the Main and SME Boards of the Shenzhen Stock Exchange.
The index is weighted by free float-adjusted market capitalization subject to a 10% cap per stock. Reconstitution and rebalancing occur on a semi-annual basis in June and December.
The top three sectors of the index are healthcare, industrial engineering, and software & services, which collectively account for over 60% of the total weight.
Wens Foodstuff and East Money Information are the largest two stocks with weights of 9.3% and 9.0%, respectively. The next largest constituents are Aier Eye Hospital (5.5%), Walvax Biotechnology (4.4%), and Shenzhen Mindray Bio-Medical Electronics (3.8%).
The index can be used as the foundation for index-linked investment products including ETFs.
Investors looking for immediate access to ChiNext stocks could consider the VanEck Vectors ChinaAMC SME-ChiNext ETF (CNXT US) listed on NYSE Arca. The fund, which has around $30m in assets, seeks to replicate the SME-ChiNext 100 Index, an index measuring the performance of the 100 largest and most liquid China A-share stocks listed on ChiNext.
Hong Kong-based investors could consider the CSOP SZSE ChiNext ETF (3147 HK), which offers a comparable exposure. It tracks the ChiNext Index, which is similarly composed of the 100 largest and most liquid A-share stocks listed and trading on ChiNext, and has around $70m in assets.