Launch of ETF to fuel market's attraction
By Louise Ho |
March 28, 2012, Wednesday
|
Print Edition
Print Edition
FUND companies Huatai-PineBridge and Harvest Fund Management will in April launch the CSI 300 Exchange Traded Fund listed on the Shanghai and Shenzhen stock exchanges, which signals a major move in creating a blue chip market and paves the way for more ETF launches, analysts said yesterday.
The CSI 300 ETF - China's first cross-exchange ETF - is an important step in building up a comprehensive blue chip market in China and may pave the road for more cross-border ETF products, said Han Yong, general manager of Huatai-PineBridge.
Industry watchers said the CSI 300 ETF has a good investment value. As the CSI 300 Index covers 70 percent of the total value of China's yuan-denominated A-share market, investing in the ETF reflects confidence in China's most significant industries, said a recent report by the China International Capital Corp.
The price-to-earnings ratio of the CSI 300 Index is 11.76, a historical low, according to data by TX Investment Consulting last Friday.
Analysts estimated that the combined asset value of the two fund companies' CSI 300 ETFs will be more than 10 billion yuan (US$1.58 billion).
"The introduction of the CSI 300 ETF provides a transparent and low cost investment tool through passive equity investment," said Yang Yu, general manager of the structural products investment department at Harvest. Passive investment refers to buying and holding an investment.
Also the management fee of ETF varies from 0.3 percent to 0.5 percent, below a stock fund's fee of 1.2 percent, Yang said.
Business consultancy Z-Ben Advisors said in a report that it expects 2012 to "see an increase in the growth of passive equity funds as CSI 300 ETFs attract institutional and retail investors."
"With years of product development, support from regulators and positioning as sole access to CSI 300 ETFs, Harvest and Huatai-PineBridge are well positioned to realize strong inflows in fundraising during their product launches and subscription period," Z-Ben said.
Huatai-PineBridge will launch its CSI 300 ETF in Shanghai on April 5 when Harvest will do so in Shenzhen.
The CSI 300 ETF - China's first cross-exchange ETF - is an important step in building up a comprehensive blue chip market in China and may pave the road for more cross-border ETF products, said Han Yong, general manager of Huatai-PineBridge.
Industry watchers said the CSI 300 ETF has a good investment value. As the CSI 300 Index covers 70 percent of the total value of China's yuan-denominated A-share market, investing in the ETF reflects confidence in China's most significant industries, said a recent report by the China International Capital Corp.
The price-to-earnings ratio of the CSI 300 Index is 11.76, a historical low, according to data by TX Investment Consulting last Friday.
Analysts estimated that the combined asset value of the two fund companies' CSI 300 ETFs will be more than 10 billion yuan (US$1.58 billion).
"The introduction of the CSI 300 ETF provides a transparent and low cost investment tool through passive equity investment," said Yang Yu, general manager of the structural products investment department at Harvest. Passive investment refers to buying and holding an investment.
Also the management fee of ETF varies from 0.3 percent to 0.5 percent, below a stock fund's fee of 1.2 percent, Yang said.
Business consultancy Z-Ben Advisors said in a report that it expects 2012 to "see an increase in the growth of passive equity funds as CSI 300 ETFs attract institutional and retail investors."
"With years of product development, support from regulators and positioning as sole access to CSI 300 ETFs, Harvest and Huatai-PineBridge are well positioned to realize strong inflows in fundraising during their product launches and subscription period," Z-Ben said.
Huatai-PineBridge will launch its CSI 300 ETF in Shanghai on April 5 when Harvest will do so in Shenzhen.
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