HSBC Global Asset Management has launched the HSBC MSCI China A inclusion UCITS ETF on the London Stock Exchange. Further listings are planned across key markets in Europe.
The HSBC MSCI China A inclusion UCITS ETF offers access to a cost-efficient and transparent way to invest in the dynamic inclusion of mainland Chinese securities in the MSCI Emerging Markets Index, and will be paying dividends on a quarterly basis. The physically replicated ETF is the first its kind to be constructed specifically for accessing China through a Stock Connect programme in Europe, rather than using an RQFII quota.
The ETF is designed to track the progressive partial inclusion of China A shares in the MSCI Emerging Markets Index over time. It consists of large cap China A stocks that are accessible through either the Shanghai or the Shenzhen Stock Connect programmes, and that have been included in the MSCI China Index and the MSCI Emerging Market Index with an inclusion factor of 2.5 per cent on 1 June 2018. This will increase to 5 per cent in the second stage of the inclusion process in September.
Joseph Molloy, Head of Index and Systematic Equity Portfolio Management, HSBC Global Asset Management, says: “China is now the world’s largest economy in terms of purchasing power and its estimated growth exceeds that of the developing world. The HSBC MSCI China A inclusion UCITS ETF gives foreign investors quick and easy access to mainland Chinese equities through China A shares, which were traditionally only available to mainland citizens. As the ETF is designed to track the progressive partial inclusion of China A shares in the MSCI Emerging Markets Index over time, we believe it provides an excellent building block for investors to future-proof their portfolio using one single share.
“HSBC is one of the largest foreign financial institutions in China, with a long-standing heritage, strong expertise and an extensive on-the-ground footprint. This leaves HSBC Global Asset Management perfectly placed to help investors access this market.”