Lyxor is expanding its emerging market range with a physical exchange-traded fund providing exposure to China domestic shares or “A-Shares”.
The Lyxor Ucits ETF MSCI China A is the first physical A-Shares ETF listed on Euronext Paris and will also list on the London Stock Exchange on 9 September 2014.
The ETF tracks the evolution of the MSCI China A Index of stocks listed in Renminbi on the domestic markets of Shanghai and Shenzhen. The index comprises approximately 460 companies providing better coverage and sector diversification than similar indices reviewed.
The fund is managed by the Hong Kong subsidiary of Fortune SG, Lyxor’s Chinese joint-venture, which was awarded RQFII quota by Chinese authorities with a view to launch the ETF in Europe.
Arnaud Llinas, Lyxor’s global head of ETFs and indexing, says: “A-Shares represent approximately 75 per cent of China’s total equity market capitalisation. However, until now these stocks have been under-represented in portfolios. In spite of remaining investment constraints linked to the quota system, the pace of regulatory reforms and other initiatives like the Shanghai/Hong Kong Stock Connect program increase the perspective of inclusion and many international investors are already seeking A-Shares investment opportunities. Our new ETF responds to these needs in a flexible and diversified vehicle.”
Stéphane Roger, CEO of Fortune SG’s HK subsidiary, says: “Since its creation in 2003, Fortune SG has become a leading fund management company in China and has built a strong franchise in equity funds. Fortune SG is thus delighted to open a door to China A-Shares markets in partnership with Lyxor, its shareholder and one of the most prominent ETF providers in Europe.”