HSBC Global Asset Management has launched the HSBC MSCI China A inclusion Ucits ETF on the London Stock Exchange.
Further listings are planned on other European stock markets.
The HSBC MSCI China A inclusion Ucits ETF will provide investors with the opportunity to invest in mainland Chinese securities in the MSCI Emerging Markets Index. It will pay dividends on a quarterly basis.
MSCI is in the process of adding about 230 China-listed shares to its emerging market benchmark in a two-step process in June and September. The move is expected to unleash a surge of foreign inflows into the country’s stock markets.
“The physically replicated ETF is the first its kind to be constructed specifically for accessing China through a Stock Connect programme in Europe, rather than using an RQFII quota,” the group said.
The ETF is designed to track the progressive partial inclusion of China A shares in the MSCI Emerging Markets Index. It consists of large cap China A stocks that are accessible through either the Shanghai or the Shenzhen Stock Connect programmes, and that have been included in the MSCI China Index and the MSCI Emerging Market Index with an inclusion factor of 2.5% on 1 June 2018. This will increase to 5% in the second stage of the inclusion process in September.
Joseph Molloy, head of index and systematic equity portfolio management, HSBC Global Asset Management said: “China is now the world’s largest economy in terms of purchasing power and its estimated growth exceeds that of the developing world. [The ETF] gives foreign investors quick and easy access to mainland Chinese equities through China A shares, which were traditionally only available to mainland citizens.”