Bearish China market hurts ETF debutants
26 August 2013
By Asia Asset Management
Newly launched ETFs in China were hit by significant redemptions as China’s A-share market continued to tumble last week.
According to figures from Wind Information, two physical gold ETFs launched by HuaAn and Guotai in late July suffered considerable redemptions. The funds’ total AUMs deflated 86% and 65% to 456 million RMB (US$72.3 million) and 155 million RMB as of August 20, respectively.
Meanwhile, equities-linked ETFs were also hit by the bearishness. The Penghua CSI 300 ETF, which made its IPO debut on August 16, recorded a single-day net redemption of 130 million units for asset shrinkage of 22.86% to date. Separately, the Bosera SSE Corporate Bond 30 ETF has seen its AUM fall by 6.57% since the index fund went public on August 16.
The more established A-share linked ETFs have also suffered huge redemptions in August amid the volatile conditions. The China AMC SSE 50 ETF posted a net redemption of more than 7 million units during the morning trading session of August 19.
The SSE Composite Index has fallen more than 10% over the previous six months.
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