Rough ride for Mainland ETFs

08 January 2014   Category: News, Asia, China   By Asia Asset Management

Mainland ETF sponsors have been speeding up product launches in order to garner a greater share of the market. This trend was highlighted by the fact that the total number of newly-listed ETFs grew from 12 in 2012 to 34 by the end of last year, according to statistics from Wind Information.

Of these, 26 of the IPO rookies were A-share equity-tracking ETFs and three were commodity-linked ETFs – including the country’s first batch of gold ETFs – the HuaAn Gold ETF, the Guotai Gold ETF, and the E Fund Gold ETF. 

Meanwhile, the total size of ETF IPOs declined from 48.5 billion RMB (US$8.01 billion) in 2012 to 24.3 billion RMB in 2013 in absence of heavyweight offerings such as the listings of the Huatai-Pinbridge CSI 300 ETF and the Harvest CSI 300 ETF in 2012.  

Furthermore, Mainland investors seemingly fell out of favour with ETF products due to the downtick of the stock market – many newly-listed ETFs suffered significant redemptions last year. For example, the Harvest CSI 500 ETF has shrivelled by more than 90% since its inception in Feb 2012.

On a brighter note, the E Fund CSI 300 ETF was last year’s best performing newly-listed ETF with an increase of 453% in market valuation.