RMB ETF providers encounter contrasting fortunes
06 December 2012
News, China, Global
By Hui Ching-hoo
ETF providers have witnessed diverse responses to RMB qualified foreign institutional investor (RQFII) ETF product offerings in recent weeks. The Harvest MSCI China A-Share ETF, for instance, saw a net outflow of 36 million units in November, contrasting starkly to the new issuance of 424 million units for the CSOP FTSE China A50 ETF.
According to statements published via the Hong Kong Stock Exchange, total AUM of the Harvest China A-share ETF shrank 20% to 1.46 billion yuan (US$230 million) last month, while the AUM for CSOP FTSE China A50 ETF grew 28%.
The promising gains coincided with the launch of a total of 23 warrants under the CSOP FTSE China A50 ETF.
Such divergence may partly be attributable to the firms’ respective RQFII quotas. CSOP has been granted a total of 10 billion RMB in ETF quotas from the State Administration of Foreign Exchange (SAFE) and, being the first firm to receive a quota, has enjoyed first-mover advantage in the field. Though the total Harvest RQFII ETF quota is relatively small at 5 billion RMB, it is applying for an additional quota from SAFE.
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