The expected last trading day for the firm’s MSCI China A International Index ETF is on 2 March, according to a filing from the bourse.
Last year, several firms announced the delisting of their China A-share ETFs. Among them were all three ETFs managed by China Universal Asset Management, China Asset Management’s CES China A80 Index ETF, CSOP Asset Management’s CSOP CES China A80 ETF and 10 ETFs from Deutsche Asset Management.
Most of these ETFs failed to gain sufficient assets from investors.
Delisted China A-share ETFs in Hong Kong in 2017-2018
| Firm name | ETF | Last trading day | AUM |
| China Universal Asset Management | C-Shares CSI 300 Index ETF | 15 January 2018 | RMB 10.6m (January) |
| China Universal Asset Management | C-Shares CSI Consumer Staples Index ETF | 15 January 2018 | RMB 6m (January) |
| China Universal Asset Management | C-Shares CSI Healthcare Index ETF | 15 January 2018 | RMB 11.2m (January) |
| CSOP Asset Management | CSOP CES China A80 ETF | 18 December 2017 | RMB 6.5m (November 2017) |
| China Asset Management | China AMC CES China A80 Index ETF | 9 November 2017 | RMB 3.56 (June 2017) |
| Deutsche Asset Management | DB x-trackers CSI 300 Banks Ucits ETF | 12 July 2017 | $1.7m (July 2017) |
| Deutsche Asset Management | DB x-trackers CSI Consumer Discretionary Ucits ETF | 12 July 2017 | $10.27m (July 2017) |
| Deutsche Asset Management | DB x-trackers CSI 300 Energy Ucits ETF | 12 July 2017 | $644,000 (July 2017) |
| Deutsche Asset Management | DB x-trackers CSI 300 Financials Ucits ETF | 12 July 2017 | $1.80m (July 2017) |
| Deutsche Asset Management | DB x-trackers CSI 300 Health Care Ucits ETF | 12 July 2017 | $6.06m (July 2017) |
| Deutsche Asset Management | DB x-trackers CSI 300 Industrials Ucits ETF | 12 July 2017 | $862,000 (July 2017) |
| Deutsche Asset Management | DB x-trackers CSI 300 Materials Ucits ETF | 12 July 2017 | $932,000 (July 2017) |
| Deutsche Asset Management | DB x-trackers CSI 300 Real Estate Ucits ETF | 12 July 2017 | $1.2m (July 2017) |
| Deutsche Asset Management | DB x-trackers CSI Transportation Ucits ETF | 12 July 2017 | $1.12m (July 2017) |
| Deutsche Asset Management | DB x-trackers CSI 300 Utilities Ucits ETF | 12 July 2017 | $1.03m (July 2017) |
Source: FSA
There are 29 ETFs in Hong Kong that invest solely in China A-shares. Together they have $8.67bn in assets. However, around 90% of these assets are heavily concentrated in just three ETFs, according to HKEX data.
China A-share ETFs in Hong Kong
| ETF | Manager | AUM ($bn) | Market share |
| Ishares FTSE A50 China Index ETF | Blackrock | $3.3bn | 38.05% |
| CSOP FTSE China A50 ETF | CSOP Asset Management | $2.82bn | 32.47% |
| ChinaAMC CSI 300 Index ETF | China Asset Management | $1.72bn | 19.81% |
Source: HKEX
MSCI inclusion and delisting
The ETF that Blackrock will delist tracks the MSCI China A International Index, which is comprised of A-shares from an international QFII/RQFII investor’s perspective.
According to the firm’s website, the product has significantly more assets − RMB 43m ($6.79m) − compared to similar rival products that were delisted.
A Hong Kong-based spokesman for the firm said the reason for the fund closure is that it no longer has a purpose.
“The premise of the underlying index, which is to provide exposure for the inclusion of China A-shares in global indices, no longer exists.
“Following market and shareholder feedback, Stock Connect is now the privileged route by MSCI to achieve inclusion of A-shares into their broad indices, utilising a different universe of underlying constituents and a different index calculation methodology,” the spokesman said.
Two other firms manage ETFs that follow the same underlying index: CSOP Asset Management and GF International Investment Management. It is uncertain whether these products will be candidates for delisting as well.
The CSOP MSCI China A International ETF has RMB 7.85m in assets, while the GFI MSCI China A International ETF, which is the only ETF that GF International manages in Hong Kong, has RMB 32.52m in assets.
FSA sought information from CSOP AM and GF International about their views on the relevancy of the underlying index, but they did not reply in time for publication.
Blackrock manages two other ETFs that invest only in the onshore market, as well as the Ishares MSCI China Index ETF, which invests in Chinese companies listed in Hong Kong. It has HK$2.46bn ($310m) in assets, according to HKEX data. The spokesman said that this ETF provides the building block exposure for China in MSCI broad indices, which are expected to include China A-shares.
Separately, China AMC last week launched the MSCI China A Inclusion Index ETF, which the firm said is the world’s first A-shares ETF that tracks the MSCI China A Inclusion Index. The index is designed for global investors accessing the A-shares market using the Stock Connect framework.
