The KraneShares Bosera MSCI China A ETF (KBA), the only US listed MSCI-benchmarked ETF providing exposure to the mainland Chinese markets, has transitioned to the new MSCI China A International Index.
“The late October launch of the Shanghai-Hong Kong Stock Connect programme will allow foreign investors to access the onshore market for the first time without Qualified Foreign Institutional Investor quota (QFII),” says Brendan Ahern, managing director of KraneShares “We believe the Connect programme will remove investment barriers that have historically blocked index providers like MSCI from adding the onshore Chinese markets to their emerging market and global indices. With USD1.3 trillion benchmarked to the MSCI Emerging Markets Index, full inclusion of the MSCI China A International Index could see significant flows into the securities KBA owns today.”
Jonathan Krane, CEO of KraneShares, says: “KBA’s strategic transition to the new MSCI index allows it to hold the mainland securities slated to be owned by broad based MSCI indices ahead of their possible inclusion. In addition to the possible upgrade, the mainland market offers very inexpensive valuations.”