ICBC Credit Suisse Asset Management (International) Company (ICBCCSI) has launched a UCITS ETF tracking the S&P China 500 Index, listed on the Deutsche Borse.
In July, ICBCCSI and WisdomTree entered into a global product partnership in which the companies can jointly launch, market and distribute ETFs tracking the S&P China 500 Index around the world.
The S&P China 500 Index uses a rule-based process to measure the world's second largest economy and equity market. The index captures the key characteristics of the total Chinese equity market – including A-shares and H-shares, and other international listings – by using predominantly large and liquid securities.
The use of a sector-based stock selection process then allows the index to reflect the sector allocation at the broad China index level. This methodology allows the index to be more reflective of the evolution of the Chinese economy than other equity indices, which may be limited in the share classes that they include.
Laura Lui, head of index and quantitative investment of ICBCCSI, says: "The global product partnership between ICBCCSI and WisdomTree will bring significant opportunities to both of our companies. WisdomTree has an established presence in the ETF world and an impressive track record as an ETF issuer. This complements ICBCCSI's in-depth understanding of the Chinese markets, as jointly we bring to investors pioneering solutions for diversified, transparent and efficient tools for accessing China opportunities. We are excited about the listing of this ETF on Deutsche Borse."
Nizam Hamid, WisdomTree's ETF strategist in Europe, says: "Market access to Chinese equities has long been an issue for investors and the creation of a UCITS ETF that covers all the relevant share classes in a single product brings substantial benefits. It represents a cost effective means of allocating to a broad index whilst removing the operational and administrative burdens often associated with accessing A-shares. The collaboration with ICBCCSI means that European investors have a transparent and liquid single product to invest in China."
"As the largest global resource for essential index-based concepts, data and research, S&P Dow Jones Indices is committed to developing transparent benchmarks that deliver insights into the performance of Chinese equities, an increasingly important market segment for international investors," says Alex Matturri, chief executive officer at S&P Dow Jones Indices. "We are pleased to have licensed the S&P China 500 Index to WisdomTree and ICBCCSI."