Bosera Asset Management in Hong Kong has decided to change the investment strategy of its ETF that tracks the FTSE China A50 Index, according to an exchange filing.
The Bosera FTSE China A50 Index ETF will be renamed to the Bosera STAR 50 Index ETF and will track the SSE Science and Technology Innovation Board (STAR MARKET) 50 Index.
The change will take effect on 18 February and the rebalancing to the constituents of the new index will take place over a period of up to five trading days.
In addition, the filing added that Bosera AM will cease to be the investment adviser of the ETF, and New York-headquartered Krane Funds Advisors will be appointed as the investment adviser of the repurposed product. Bosera AM noted that it will continue to “retain discretionary powers in the management of the sub-fund” and Krane Funds will only provide investment advice to the manager.
Both Bosera AM and Krane Funds have partnered previously to launch the New York-listed KraneShares Bosera MSCI China A Share ETF in 2014, according to a statement at the time.
FSA sought more information from Bosera AM, but it was not able to reply in time for publication why it decided to change the ETF’s strategy.
The move comes after Krane Funds, which is known in the US for its China-focused ETFs, announced last week that it launched a New York-listed ETF also tracking the STAR Market 50 Index.
The index consists of the 50 largest securities listed on the STAR market. Since its establishment in July 2019, the STAR Market has become one the largest IPO markets globally and a premier listing venue for prominent Chinese “unicorns” or privately held startup companies valued at over $1bn, according to the Krane Funds announcement.
In just over a year, the STAR Market facilitated 200 companies to raise $44bn, it added.
COMPETITION
The new version of Bosera’s ETF will be the only ETF investing into the STAR Market.
Bosera’s existing China A50 ETF may have faced intense competition against other products listed in Hong Kong that also track the same index.
Launched in 2013, the ETF only has around HK$16.4m ($2.1m), which compares with the HK$14.2bn AUM of the CSOP FTSE China A50 ETF, according to data from the Hong Kong Exchange & Clearing (HKEX).
Two other products, the iShares FTSE A50 ETF and the Amundi FTSE China A50 ETF, have HK$19.9bn and HK$319m in assets, respectively, HKEX data shows.
