New York investment manager Van Eck Global has launched the first ETF on the ASX giving Australian investors direct exposure to China's A-shares market.
The Market Vectors ‘China ETF’, having ASX code ‘CETF’, tracks China's CSI 300 Index which represents the largest and most liquid shares listed on mainland China's two stock exchanges, Shanghai and Shenzhen.
Arian Neiron, Managing Director, Van Eck Global Australia, says: "China represents the second largest equity market in the world after the US and many of China's most important companies can only be accessed through A-shares. While mainland China remains largely closed for foreign investors, through our partnership with China Asset Management Company (ChinaAMC), one of the leading asset managers in China, we are able to offer direct exposure to A-shares. By trading through CETF on ASX, Australian investors can now directly access exposure to China A-shares via an ETF for the first time.”
CETF gives Australian investors the opportunity to access a diversified portfolio of the most traded and largest 300 China A-shares at a very early stage of China’s transition to a consumption based economy and before A-shares are included in major global indices.
Neiron says: “China is currently only 1.72 per cent of the MSCI World All Countries Index. It is 30 per cent of the world economy and growing. This is a large gap that is going to be filled first by indices, then by institutional investors. We expect this growth will provide strong support for A-shares. We are excited to list the first ETF on ASX giving Australian investors the opportunity to get into the Chinese growth story at the earliest possible stage.”
Frank Zhang, CEO of ChinaAMC Hong Kong, says: "China is in a transitional period with the growth rate moderating from high to medium as growth becomes more balanced and sustainable. As a result of this process, capital markets will benefit from monetary easing, financial and fiscal reforms and re-allocation of domestic and international assets. With rapid development and opening-up of the China market, we expect A‑shares to become an increasingly important part of asset allocation for global investors.”
