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GF launches A-share ETF

China-based GF International Investment Management said it will launch Asia’s first ETF that tracks the MSCI China A International Index.

The index, launched a year ago as a precursor to the full inclusion of A-shares in the MSCI Emerging Markets Index, is comprised of 370 China A-shares.

The MSCI China A International Index represents the A-share component of the MSCI Emerging Markets benchmark when full inclusion happens, said Rene Veerman, managing director of Hong Kong & Taiwan of MSCI.

Azra Lau, head of ETF’s for GF, added:­ “As the [full] inclusion of A-shares in the MSCI Emerging Markets Index draws closer, investors benchmarking the index, especially pension funds, insurers, asset managers, sovereign wealth funds and endowments will need to rebalance. This product gives them the opportunity to increase their exposure in a controlled, flexible way.”

The free-float adjusted index is expected to more readily reflect ongoing market expansion, because it has no fixed number of constituent companies, the firm said.

The ETF is to be listed on the Hong Kong Stock Exchange on Wednesday, 29 July, and will trade in both renminbi and Hong Kong dollars.

Government intervention during the recent mainland stock market rout has raised doubts about the full inclusion of A-shares in MSCI’s Emerging Market index. Before the government took action to stabilize the market, MSCI inclusion was expected to happen before the end of year.

Part of the Mark Allen Group.