China Universal to launch first RQFII sector ETFs

07 May 2014   Category: News, Asia, China, Global, Hong Kong   By Daniel Shane

China Universal Asset Management (CUAM), a Mainland-based fund manager with approximately US$25.7 billion in AUM, will launch its first sector-themed RQFII ETF products later this month via its Hong Kong subsidiary, China Universal Asset Management (Hong Kong) (CUAMHK).

The C-Shares CSI Consumer Staples Index ETF and C-Shares CSI Healthcare Index ETF are the second batch of products under CUAM’s C-Shares brand. The two physical ETFs will list on the main board of the Hong Kong Stock Exchange from May 12.

The two products will track the performance of the CSI Consumer Staples Index and CSI Healthcare Index via a full replication strategy. The former index consists of A-shares stocks in the agriculture, and food and beverage manufacturing industries, as well as retail stocks in the CSI 800 Index. The latter index is made up of securities in the fields of Chinese patent medicine, medical equipment and medical products.

“We expect that the rapid growth of China as well as the continuous structural transformation of its society and economy will create structural investment opportunities for the consumer staples and healthcare industries in mainland China,” said Andy Lin Li Jun, group chief executive officer of CUAM and chairman of CUAMHK.

“These two sectors are more resilient to economic cycles and tend to hold up better in declining markets. Therefore, we decided to launch these two sector ETF products to open up investment channels for international investors to capture investment opportunities with high growth potential.”

CUAM said that the issue price of the C-Shares CSI Consumer Staples Index ETF will be approximately HK$11 (US$1.42) per unit, while the C-Shares CSI Healthcare Index ETF will be around HK$13 per unit. The firm’s management fee is 0.5%.

CUAMHK first broke into the RQFII ETF market with the launch of its first index product, the C-Shares CSI 300 Index ETF, on July 3 last year.