The Chinese government has approved Exchange-traded funds (ETFs) to track the Shanghai Stock Exchange, media reports said.
Zhang Yankun, a fund manager with Beijing Hone Investment Management, told the media, “These ETFs won’t just give China’s vast population of retail investors access to Star shares, they’ll also help bring in incremental flows to the board. Index-tracking flows are key to ensure the stable and healthy development of the board.”
These ETFs have been granted: Huatai-PineBridge Fund Management, China Asset Management, ICBC Credit Suisse asset management and E Fund Management.
The ETFs will make their debut to track the newly established science and technology innovation board 50 Index, while attracting 20 billion yuan between them. These ETFs are jointly established by the Shanghai bourse and China Securities Index in 2019, making them the first to directly replicate the index.
The Star 50 Index consists of the 50 largest stocks listed on the Star Market.
ETFs in China nearly doubled in value in the first half of the growth this year. It is reported that investments worth $157 billion were carried out in Chinese ETFs in June. Moreover, China’s stock market capitalisation is filled with 0.3 percent of equity funds.
The worth of the US ETF market is over $4 trillion, with 75 percent of the benchmark stocks. The Star 50 Index has jumped 49.7 percent from a base of 1,000 points at the end of 2019, dwarfing the 13 percent growth logged by the CSI 300 Index.