The Chinese ETF market is one of the biggest in the Asiatic region. The competition in the Chinese market is heating day by day as the biggest asset managers continue to establish the local exchange traded funds. The factors affecting the Chinese market are the currency regime, exports, infrastructure development and politics. Two of china’s biggest stock exchanges, the Shanghai Stock Exchange and the Shenzhen Stock Exchange have become high profile amongst the Chinese investors for ETF products.
With the rapid growth in Chinese stock market, the ETFs have emerged as the most successful products on there. It is ranked second behind Japan in index funds assets.
Where China is still grappling with the inflatory pressures the Chinese ETF products have managed to surpass the pressure and continue to be in demand. Just as well, as there are plenty of them in the market.
Some of the more popular Chinese ETFs include:
The iShares Fund is one of the best ETF China fund. It tracks all the big Chinese companies listed on the HKSE and it represents over 60% of China ETF portfolio. The SPDR is more diversified as it has access to all sectors and industries. It has around 150 holdings which represents 45% of China ETF portfolio. Global X and Claymore offers to gain exposure to some other specific sectors. China Real Estate ETF is known for high volatility. It may be overvalued by some economists but investors are to be careful considering investing in this ETF.
In 2010, the ETF market showed exceptional growth when the fund management companies like E-Fund Management and China Asset Management had their ETF assets reaching more than $3.9 bn. This provides a further opportunity of growth in the Chinese ETF market. It has successfully grabbed one fifth of the equity emerging ETF markets. By the mid of last year it had reached to almost $6bn. China is even using these ETFs to access the A Share market.
Selecting a Chinese ETF is the most affordable way to get into the Chinese stocks. Some ETFs focus on the large-caps, some on small-caps and some on special sectors or industries. Chinese ETF are even being traded on several foreign stock markets like US, London and Frankfurt. Chinese ETF market is currently ranked at number three in the Asiatic region with a daily trading volume of over RMB 2 billion.
As more and more fund management companies are investing in the ETF market, banking sector has also participated for its share. HSBC started off the year by launching an ETF to be listed on the London SE. with the emerging trends China has started to hold the annual ETF event inviting all the foreign stock exchanges to participate in the ETF market.