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CPG to launch China ETF in Europe

State-owned China Post Global has applied to launch a China A-shares ETF in Europe, adding to its Market Access range of ETFs on the continent, said the firm's London-based managing director Danny Dolan.
CPG to launch China ETF in Europe
Danny Dolan, China Post Global

Dolan said that the firm has applied for regulatory approval for its first ETF product tracking an onshore China’s equity index. It is expected to be launched in Europe by the end of first quarter of 2018, according to Dolan.

China Post Global (CPG) is one of the very few Chinese asset managers launching products outside China. Their offerings are so far limited to exchange-traded products.

Dolan said CPG’s products, which target institutional investors across Europe, will also remain under passive and semi-passive strategies only.

“Although there has long been a discussion around actively-managed ETFs in Europe, this type of product has not taken off.

“There is demand from clients who seek cost effective, well-designed passive and semi-passive ETFs and that remains our focus for the time being,” he noted.

CPG is the international arm of Beijing-based China Post & Capital Fund Management. CPG is majority-owned (51%) by a mutual fund joint venture between China Post Group and Capital Securities (both state-owned companies together holding 76%) and Japan’s Sumitomo Mitsui Banking Corporation (24%).

The subsidiary, with offices in Hong Kong and London, has about $1bn of assets under management, in which about $330m is from the ETF business it acquired from Royal Bank of Scotland in March 2016, according to the firm.

CPG has offices in Hong Kong and London. In 2016, it acquired the Market Access range of ETFs from Royal Bank of Scotland in 2016. The agreement included the ETFs listed on the exchanges of Germany and Switzerland.

The firm has nine ETFs listed in Frankfurt and Zurich under its Market Access brand. The firm’s gold ETF is also registered in Japan and distributed by SMBC’s securities arm.

Last month, CPG listed on the London Stock Exchange the Market Access iStoxx MUTB Japan Quality 150 Index Ucits ETF. It was was initially launched as a Luxembourg Ucits fund in May 2017 and is already available in Austria, Germany, Italy, Netherlands and Switzerland.

The ETF tracks iStoxx MUTB Japan Quality 150 Index, which is comprised of 150 Japanese stocks with quality characteristics, such as high earnings potential, low debt, sustainable cash flow and economic stability.

Dolan talked about the firm’s plans to launch smart-beta China equity ETFs in Europe in an earlier interview.

Part of the Mark Allen Group.