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Asset managers set to launch China’s first Star 50 Index ETFs


China’s securities regulator has given the nod to the first four exchange traded funds to track Shanghai Stock Exchange’s Nasdaq-style Star Market.

China Asset Management, E Fund Management, Huatai-PineBridge Fund Management and ICBC Credit Suisse Asset Management received approval from the China Securities Regulatory Commission last Thursday for their respective of Star 50 ETF and feeder fund strategies, according to separate announcements made by the firms.

The ETFs will be the first to track the newly launched Science and Technology Innovation Board 50 Index, dubbed the SSE Star 50 Index which was incorporated jointly by the Shanghai bourse and China Securities Index a year ago following the board’s trading debutlast July.

At that time, 15 generally tech-themed ETFs emerged in the onshore market, attracting more than Rmb100m ($14.1m) in net inflows in just one month after the tech board went live.

This article was previously published by Ignites Asia, a title owned by the FT Group.

The Star 50 Index consists of the 50 largest stocks listed on the Star Market that have also passed certain liquidity requirements. Constituents will be weighted by float-adjusted market capitalisation, which generally serves the purpose of reflecting market trends because it only takes into consideration the shares that are available for trade.

Around 160 companies with a combined market cap of Rmb3tn are now listed on the market, according to Wind Info, citing ICBC Credit Suisse Asset Management index investment head Zhang Yun.

From a base of 1,000 points at the end of 2019, the Star 50 Index has surged 49.7 per cent so far this year, dwarfing the 13 per cent growth logged by the CSI 300 Index, which tracks the performance of the top 300 stocks traded in Shanghai, according to Wind Info.

Scheduled for initial fundraising next Tuesday, the four new ETFs and their respective feeders — portfolios that share at least 90 per cent of the same underlying assets as the master ETFs, but instead of being listed on the exchange, are sold by fund houses, distributing banks and licensed third-party sellers — are now expected to bring about investment opportunities high in growth potential and profitability, according to a China Fund News report.

*Ignites Asia is a news service published by FT Specialist for professionals working in the asset management industry. It covers everything from new product launches to regulations and industry trends. Trials and subscriptions are available at ignitesasia.com.



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