Harvest finalising RQFII ETF launch
31 August 2012
News, Asia, China, Hong Kong
By Hui Ching-hoo
Harvest Global Investments (HGI) is finalising the listing of its ETF under the RQFII initiative. The exact timing of the launch of the ETF isn’t clear at this writing. Even so, the Hong Kong unit of China’s second largest fund house has been working to iron out the details in the past few months. HGI’s ETF is the fourth and final product approved by the Hong Kong Securities and Futures Commission under the scheme which saw China Asset Management becoming the first to list its ETF on July 17.
China Southern listed its ETF on August 28 while E-Fund listed its ETF on August 27.
Of the four ETF managers, China AMC’s benchmark for its ETF, the CSI 300 is one of the most widely used indexes on the Mainland, making it easier for the fund house to promote the product. China AMC’s RQFII ETF reportedly raised 3.1 billion yuan (US$492 million) at the time of its listing.
As for the others, China Southern’s ETF tracks the FTSE A 50, E Fund the 100 CSI A-Share Index while Harvest’s ETF will track the MSCI A-Shares Index, an index that some analysts say isn’t so widely used nor popular on the Mainland.
The primary dealers for Harvest’s ETF are understood to be Deutsche Bank and Morgan Stanley; it is not clear how the firm’s fund raising activities have fared in light of the current challenging market conditions.
The CSRC had earlier set aside 50 billion yuan (US$7.9 billion) quota for the second phase of the RQFII scheme and it remains uncertain whether the market watchdog will grant more RQFII ETF licenses in the future.
An industry source says that the Chinese regulator favours ETFs more than anything else because they are very simple for them to understand. “As long as you have the technology right, you don’t have to worry about the volatility of active managers,” he added.
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