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CSOP AM preps its first ETF in Singapore

The firm will also make use of the new variable capital company (VCC) framework for the fund.
Downtown Singapore

CSOP Asset Management has filed an application with the Monetary Authority of Singapore (MAS) to launch the ICBC CSOP FTSE Chinese Government Bond Index ETF, according to the regulator’s records.

When approved, the fund will be available to retail investors in the Lion City.

The fund will aim to replicate the performance of the FTSE China Government Bond Index, which includes government bonds issued in the mainland. The fund will invest in the onshore bond market via the China Interbank Bond Market, which opened to foreign investors in 2016, its prospectus explained.

CSOP AM will act as the manager of the ETF, while ICBC Wealth Management and ICBC Asset Management (Global) are “non-discretionary investment advisors” of the fund, the prospectus noted.

FSA sought more information from CSOP AM, but it was not able to provide more details as the product is still under regulatory review.

The prospectus also shows that CSOP’s ETF will make use of the variable capital company (VCC) framework, a new corporate structure that can be used for investment funds that should provide fund managers with greater operational flexibility and cost savings. The MAS and the Accounting and Corporate Regulatory Authority launched the framework in January and expect that the new structure will encourage more funds to be domiciled in Singapore.

First China fixed income ETF

This will be the first ETF that CSOP AM will be launching in Singapore. It will also be the first China-focused fixed income ETF in the Lion City.

In total, there are 57 ETF products listed on the Singapore Exchange, with 49 of the being equity products, according to data from the local bourse. Unlike Hong Kong where ETF products are usually focused on China or Hong Kong indices, Singapore is mostly real estate investment trusts- (Reits) or Asean-focused.

CSOP AM’s move follows after it set up a Singapore office as a subsidiary of its Hong Kong business in October. In Singapore, the has asset management and family office businesses, according to its website.

In Hong Kong, CSOP AM has 22 funds authorised by the Securities and Futures Commission (SFC), of which 19 are ETFs, including ten leveraged and inverse (L&I) products, according to SFC’s website.

Part of the Mark Allen Group.