Source, a London-headquartered provider of exchange-traded funds, and CSOP Asset Management, a Hong Kong-based asset manager, have cross-listed the CSOP Source FTSE China A50 UCITS ETF (CHNA) on the SIX Swiss Exchange.
The ETF provides exposure to China A shares, namely renminbi-denominated shares of domestic Chinese companies listed on mainland Chinese exchanges.
The ETF, which made its debut in January on the London Stock Exchange, was the first in Europe to offer direct physical exposure to the China A-shares market.
Since its launch, the fund has gathered more than $240m in assets on the back of strong demand from investors.
The fund is linked to the FTSE China A50 Index, an index comprising the 50 largest A-share companies by market capitalisation, adjusted for liquidity and tradability.
The A-shares market is widely viewed as the most authentic Chinese equity market. It is made up of domestic, onshore renminbi-denominated securities traded on mainland Chinese exchanges. The market represents over 4% of the global equity market but has been difficult to access, particularly for smaller investors, owing to tight controls on foreign share ownership.
The CSOP Source FTSE China A50 UCITS ETF is able to invest directly in physical A shares under the Renminbi Qualified Foreign Institutional Investor (RQFII) quota scheme. Investors with RQFII status may, within their allocated quota, buy and sell A shares freely. Hong Kong-based CSOP is currently the largest RQFII manager of A shares globally and has been granted quota specifically for this ETF.
CSOP’s existing CSOP FTSE China A50 ETF (2822), listed in Hong Kong, is the largest and most actively traded RQFII ETF, with assets of RMB 20.9 billion ($3.4bn).
Chen Ding, CEO of CSOP, commented: “We are delighted to offer this ETF to Swiss investors. There has been significant demand for our European ETF and look to meet the requirements of the Swiss investor community with this listing”
Ted Hood, CEO of Source, added: “This listing is a re-iteration of our commitment to the Swiss market. This addition to our current offering of 30 ETPs allows all Swiss investors – not just large institutions with their own investment quotas – to invest directly in one of the world’s most important equity markets. CSOP’s proven knowledge of the Chinese market and their experience managing one of the most successful RFQII ETFs allows us to offer an efficient, well-structured product.”
The fund is denominated in RMB and trades on the SIX Swiss Exchange in USD and the London Stock Exchange in USD and GBP. It has a management fee of 0.99% and a total expense ratio of up to 1.11%.
Investors will be exposed to fluctuations in the exchange rate between RMB and the currency in which they are trading.