United Overseas Bank (UOB) Asset Management has launched a new ETF in Singapore providing exposure to the largest Chinese A-share companies trading on ChiNext.
The ChiNext is a Nasdaq-style board of the Shenzhen Stock Exchange which aims to attract innovative and fast-growing enterprises.
The UOBAM Ping An ChiNext ETF has been listed on Singapore Exchange where it is available to trade in Singapore dollars (CXS SP) and US dollars (CXU SP).
The fund is the first ETF listed in Singapore via the ETF link collaboration between Singapore Exchange and Shenzhen Stock Exchange which was announced last year.
The fund tracks the ChiNext Index by investing wholly in the Shenzhen-listed Ping An ChiNext ETF which is managed by Ping An Fund Management.
The ChiNext Index is the flagship index of the ChiNext market – a Nasdaq-style board of the Shenzhen Stock Exchange which aims to attract innovative and fast-growing enterprises, especially high-tech firms, by offering less stringent listing standards compared to the exchange’s Main and SME Boards.
The index comprises the 100 largest and most liquid A-shares listed on the ChiNext market, excluding firms deemed to have insufficient liquidity.
Constituents are weighted by float-adjusted market capitalization, and the index is reconstituted and rebalanced semi-annually with buffer rules helping to limit unnecessary turnover.
As of the end of October, stocks from the industrials and healthcare sectors dominated the ChiNext Index with weights of 38.8% and 24.7%, respectively, followed by information technology (17.0%), financials (6.4%), and materials (6.1%).
Notable stock positions included Contemporary Amperex Technologies (16.0%), East Money Information (5.7%), Shenzhen Mindray Bio-Medic (5.1%), Sungrow Power Supply (4.6%), and Shenzhen Inovance Technologies (4.3%).
The ETF comes with a maximum expense ratio of 1.25%.
Thio Boon Kiat, Group Chief Executive Officer, UOBAM, commented: “We are proud to be the first fund manager in Singapore to launch this ETF via the Singapore-Shenzhen ETF link. This ETF not only allows investors to access innovative China-based companies in high-growth sectors but also provides the opportunity to tap deep local knowledge from a Chinese fund manager. We look forward to bringing more investment opportunities from China to our investors by leveraging the local expertise of Ping An Fund Management Company, our China-based joint venture partner of more than ten years.”
Loh Boon Chye, Chief Executive Officer, SGX Group, added: “We are excited to build on our relationship with UOBAM and Ping An, and welcome the listing of the UOBAM Ping An ChiNext ETF. As China’s capital market continues to internationalize and grow in influence on the global stage, efficient cross-border access is key to unlocking more trading opportunities for investors. Investors can look forward to more innovative product launches via the Singapore-Shenzhen ETF link to meet their portfolio diversification needs.”