China Universal Asset Management, a subsidiary of Shanghai-based fund giant China Universal, has forayed into the RQFII ETF market by launching its first index product, the C-Shares CSI 300 Index.
China Universal plans to use its initial US$325 million RQFII quota it received in May 2013 from the State Administration of Foreign Exchange, to launch the new ETF, which will track China’s CSI 300 index and will start trading on 8 July 2013.
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The minimum subscription for China Universal’s ETF is 200 units and 300,000 units in the primary and secondary market respectively. It will be traded in RMB and HK dollar.
China Universal’s CSI300 ETF will charge a lower management fee of 0.5% with an estimated TER of 0.79%. RQFII ETF’s will directly invest into China A-sahres.
Jian Yang, managing director and head of index and quantitative investment at China Universal Asset Management said: "It may not be the best time to launch an A-share ETF, but it is certainly not the worst time o enter China. He sees enormous potential in the market as an increasing number of investors demand these type of products to access the Mainland market, and as the RMB continues to gain popularity among international investors.
"Furthermore, index provider MSCI is considering including the China A-shares market in its MSCI Emerging Markets Index. The possible inclusion will generate new opportunities for the RQFII ETF providers.
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By GlobalData"The ETF is institutional focussed and displays full replication of its underlying stocks to minimise tracking error.
"The product features a low total expense ratio, at 70 basis points, to help investors access the Mainland market more effectively," Yang added.
