China syndrome

BlackRock has launched an exchange-traded fund (ETF) for institutional investors which will track the MSCI China A International Index of over 300 large- and mid-cap stocks in mainland China.

BlackRock has a renminbi-qualified foreign institutional investor (RFQII) quota, which the ETF will use. BlackRock said that the ETF is based on physical holdings of underlying stocks and it has a total expense ratio of 0.65%. BlackRock’s head of product for iShare, Tom Fekete, commented: “The world’s second largest economy is increasingly opening its stock market to greater foreign investment, and this ETF provides investors with a new option for accessing Chinese shares.”

Aberdeen Asset Management has launched a China A share fund for long-term growth investing in mainland China.

The fund, which will be domiciled in Luxembourg, will be run by Aberdeen’s Asian equity team based in Hong Kong and Singapore, which has been investing in China since the 1980s. The fund will invest in 25-30 companies which are seen as having the prospects, from a universe of around 2,000 companies listed in Shanghai and Shenzhen. Last year the China A shares market rose by almost 47%. The shift on Chinese government policy towards greater emphasis on consumption and domestic demand is seen a positive for the fund, as it hoped that it will lead to more marketbased pricing, competition and investor transparency.