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Asia ETF Roundup (Industry) – August 2019

MSCI China A-share inclusion second step completes; HK’s onshore Chinese equity ETFs see net outflows of USD 568 million

Jackie Choy, CFA 05/09/19

For economic and market news relating to Asian ETFs, please refer to our “Asia ETF Roundup (Market) – August 2019”.


ETF Industry News

MSCI EM Update: China A-Share Inclusion Factor to 15%; Saudi Arabia Inclusion Completes

As of the close of 27 August 2019, MSCI completed the second step of its current three-stage phase of China A-share inclusion. This latest step entailed to increasing the inclusion factor of existing China A-share constituents to 15% from 10%. As a result, China A-shares now account for 7.8% and 2.5% of the MSCI China and MSCI Emerging Markets Indexes, respectively. The third step of China A-share inclusion will be implemented in November 2019, at which point mid-cap China A-shares will be added and the inclusion factor will be further increased to 20%.

At this index review, MSCI also implemented the second and final step of including the Saudi Arabian stocks in its MSCI Emerging Markets Index. After rebalancing, Saudi Arabian securities now account for 2.8% of the MSCI Emerging Markets Index.

It has been a busy year for index providers. In September, FTSE Russell will be implementing the second step of its own China A-share inclusion (inclusion factor increasing to 15% from 5%) and S&P will also be adding China A-shares into its global benchmarks in one fell swoop with an inclusion factor of 25%.

 

Chinese Equity ETF Watch – HK-Domiciled Onshore Chinese Equity ETFs See Net Outflows of USD 568 million

  • Hong Kong-domiciled ETFs in the China Equity Category saw estimated outflows of USD 17 million in August. Meanwhile, ETFs in the China Equity – A-Shares Category saw estimated outflows of USD 568 million, coming mainly out of the CSOP FTSE China A50 ETF (02822/82822) and the iShares FTSE A50 China Index ETF (02823/82823).
  • For the first eight month of 2019, Hong Kong-domiciled ETFs in the China Equity Category saw estimated outflows of USD 0.8 billion, while ETFs in the China Equity – A-Shares Category saw estimated outflows of USD 2.5 billion.
  • In the U.S. in August, we saw an estimated USD 1.1 billion of net outflows from the iShares China Large-Cap ETF (FXI) and the iShares MSCI China ETF (MCHI) and an estimated USD 0.2 billion of net outflows from the Xtrackers Harvest CSI 300 China A ETF (ASHR).

 

 

New Launches and Listings

Taishin, Shin Kong, Cathay, Yuanta Listed 4 ETFs in Taiwan

On 12 August, Taishin Securities listed an ETF on the Taiwan Stock Exchange. The ETF tracks the SG Global AI and Robotics Select index.

On 20 August, Shin Kong Investment Trust listed an RMB counter of an ETF on the Taiwan Stock Exchange. The ETF tracks the ChinaBond 10-year Treasury and Policy Bank Bond Green Enhanced Index.

On 22 August, Cathay Securities listed a leveraged ETF on the Taiwan Stock Exchange. The ETF tracks the Dow Jones Industrial Average PR 2X Leverage Carry-Free Daily Index.

On 23 August, Yuanta Securities listed an ETF on the Taiwan Stock Exchange. The ETF tracks the FTSE4Good TIP Taiwan ESG Index.

These listings put the total number of ETFs listed in Taiwan at 205, of which 85 of them are bond ETFs.

Hony Horizon, ICBC Credit Suisse, Guotai, Fortune SG, Ping An, Fullgoal, Yinhua Listed 7 ETFs in China

On 9 August, Hony Horizon Fund listed an ETF on the Shenzhen Stock Exchange. The ETF tracks the CNI Leading Private-owned Enterprises 100 Index.

On 16 August, ICBC Credit Suisse Asset Management, Guotai Asset Management and Fortune SG Fund Management listed 3 ETFs on the Shanghai Stock Exchange. These ETFs track the CSI 300 Index, the CSI Computer Index and the CSI Technology Top Index, respectively.

On 23 August, Ping An Fund Management listed an ETF on the Shanghai Stock Exchange. The ETF tracks the CSI Artificial Intelligence Index.

On 26 August, Full Goal Fund Management listed an ETF on the Shanghai Stock Exchange. The ETF tracks the CSI Military Top Index.

On 28 August, Yinhua Fund Management listed an ETF on the Shenzhen Stock Exchange. The ETF tracks the Shenzhen 100 Index.

These listings put the total number of ETFs listed in China at 228 (63 ETFs on the SZSE, 165 ETFs on the SSE).

Kiwoom, Hanwha, Korea Investment, NH-Amundi Listed 6 ETFs in South Korea

On 13 August, Kiwoom Asset Management listed an ETF on the Korea Exchange. The ETF tracks the FnGuide-KWAM Smart Mid Small Cap Index.

On 20 August, Hanwha Asset Management listed 2 ETFs. These ETFs tracks the ICE BofaAML 1-3 Year AAA-A US Corporate Index (Total Return) and the ICE BofaAML 15+ Year AAA-A US Corporate Index (Total Return), respectively.

On 28 August, Korea Investment and NH-Amundi Asset Management listed 3 ETFs. Two of these ETFs track the KOSPI 200 TR Index and the remaining one tracks the MSCI Korea Index.

These listings put the total number of ETFs listed in South Korea at 441.

 

ETFs Launched in August 2019 in the Asia ex-Japan Region

About Author Jackie Choy, CFA

Jackie Choy, CFA  

Jackie Choy, CFA is the Director of ETF Research for Morningstar Investment Management Asia