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China Sees Record Issuance of ETFs Although Size Shrinks


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The average fund recorded was just 690 million yuan due to intense competition for investment, Shanghai Securities News data show


Exchange traded funds
More than 70% of the new ETF launches, or 192, raised less than 500 million yuan. Photo: Reuters

 

China saw record issuance of exchange traded funds (ETFs) this year, but cut-throat competition has pushed the average launch size of ETFs to their lowest in nine years, the official Shanghai Securities News reported on Wednesday.

Fund houses launched 271 ETFs this year, raising a record 187.6 billion yuan ($29.44 billion), the newspaper said.

However, the average ETF launch size was just 690 million yuan, hitting the lowest level in nine years, due to intense competition for investment, according to the article.

More than 70% of the new ETF launches, or 192, raised less than 500 million yuan, the report said.

There are currently 210 so-called mini-funds in China’s ETF market, with assets under management (AUM) of less than 200 million yuan, according to the paper.

Last month, the first exchange-traded funds (ETFs) tracking MSCI’s China mega-cap index began trading, armed with $4 billion, matching the money tracking the long-established FTSE China A50.

The red-hot debut of the four ETFs – two in Shanghai and two in Shenzhen – came after the funds, based on the MSCI China A50 Connect Index raised 26.7 billion yuan ($4.17 billion) in China.

That put the MSCI index, which was launched on August 20, virtually at par with the roughly $4 billion in global ETF money currently tracking the rival FTSE China A50 Index, which was launched in 2003.

 

  • Reuters with additional editing by George Russell

 

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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