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Asia ETF Roundup (Industry) – May 2018

MSCI adds 227 A-Shares to MSCI EM Index; An estimated Rmb 1.6 billion flows into RQFII ETFs ahead of A-Share inclusion.

Jackie Choy 07/06/18

For economic and market news relating to Asian ETFs, please refer to our “Asia ETF Roundup (Market) –May 2018”.

ETF Industry News

MSCI A-Share Inclusion – 227 A-Shares Added
After the market close of 31 May 2018, MSCI added 227 A-Shares to the MSCI Emerging Markets Index. This was, up from the projected 222 A-Shares the firm announced last year due to subsequent index reviews and stock suspension conditions. Recall that this round of inclusion is a 2-step process taking place in May and August this year. By August, the inclusion factor for A-Shares will be increased to 5% putting A-Shares’ weights to around 2.5% and 0.78% within the MSCI China Index and the MSCI Emerging Markets Index, respectively. As of this writing, no other timelines have been set for further inclusion, such as an increase to the inclusion factor and/or the addition of mid-cap stocks.

RQFII ETF Watch – Net Inflows Totaled Rmb 1.6 billion in May Ahead of A-Share Inclusion

  • RQFII ETFs recorded estimated net inflows of Rmb 1.6 billion in May (6.0% of beginning AUM), which compares with net inflows of Rmb 0.7 billion in April. This puts YTD estimated net outflows from RQFII ETFs in Hong Kong at Rmb 3.6 billion.
  • Net inflows came mainly from the ChinaAMC CSI 300 ETF (83188/03188), estimated at Rmb 1.0 billion, followed by the Hang Seng China A Industry Top Index ETF (83128/03128), estimated at Rmb 0.4 billion.
  • The largest A-Share ETF by AUM in Hong Kong, iShares FTSE A50 China Index ETF (02823/82823), recorded estimated net inflow of Rmb 1.0 billion in May. This puts YTD estimated net outflows from this ETF at Rmb 6.7 billion.

 

 

New Launches and Listings

E Fund Delists an ETF in Hong Kong

On 29 May, E Fund delisted the E Fund CES China 120 Index ETF (03120/83120) from the Hong Kong Stock Exchange. The manager cited the relatively small asset size of the ETF as one of the factors in determining to terminate the ETF.

Vanguard Lists an ETF in Hong Kong

On 10 May, Vanguard listed the Vanguard Total China Index ETF (03169/09169/83169) on the Hong Kong Stock Exchange, which tracks the FTSE Total China Connect Index. The index covers Chinese stocks listed inside and outside of China where A-Shares constituents are those which are available for investment though Stock Connect. The index had around 46% weights in the A-Shares as of 30 March 2018.

This listing puts the total number of ETFs listed in Hong Kong at 183 (121 ETFs, 62 multiple counters, including 22 L&I Products).

Hanwha, KB List 7 ETFs in Korea

On 11 May, Hanwha Asset Management listed 5 ETFs on the Korea Exchange. They track the KOSPI 200 Low-Vol Tilt Index, the KOSPI 200 Momentum Tilt Index, the KOSPI 200 Value Tilt Index, the KOSPI 200 Quality Tilt Index, and the KOSPI 200 EWI, respectively.

On 11 May, KB Asset Management listed 2 ETFs tracking the F-LKTB Index.

These listings put the total number of ETFs listed in Korea at 363 ETFs.

Cathay, Fubon, Taishin List 3 ETFs in Taiwan

On 14 May, Cathay Securities Investment Trust listed an ETF on the Taiwan Stock Exchange, which tracks the FTSE Chinese Govt/Policy Bank Bond Index 0-1 Year Index.

On 17 May, Fubon Asset Management listed an ETF on the Taiwan Stock Exchange, which tracks the TIP TAIEX+ Small/Mid-Cap Alpha Momentum 50 Index.

On 24 May, Taishin Securities Investment Trust listed an ETF on the Taipei Exchange, which tracks the J.P. Morgan Custom EMBIG Core IG Index.

These listings put the total number of ETFs listed in Taiwan at 122 ETFs.

PingAn UOB, Huatai-Pinebridge, CCB, GF, Invesco Great Wall and HuaAn List 6 ETFs in China

On 4 May, PingAn UOB Fund Management listed an ETF on the Shanghai Stock Exchange, which tracks the CSI 500 Index.

On 18 May, Huatai-Pinebridge listed an ETF tracking the MSCI China A Inclusion Index.

On 21 May, CCB Principal Asset Management listed an ETF tracking the MSCI China A Inclusion Index.

On 24 May, GF Fund listed an ETF that tracks the CSI Beijing-Tianjin-Hebei’s Coordinated Development Index.

On 25 May, Invesco Great Wall listed an ETF that tracks the MSCI China A Inclusion Index.

ON 25 May, HuaAn Funds listed an ETF that tracks the CES Stock Connect Hong Kong Select 100 Index.

These listings put the total number of ETFs listed in China at 176 ETFs (54 ETFs on the SZSE, 122 ETFs on the SSE).

 

About Author Jackie Choy

Jackie Choy  

is the director of ETF Research for Morningstar Investment Management Asia