BlackRock listed the iShares MSCI China A UCITS ETF on the London Stock Exchange on Monday 13 April, giving international institutional and retail clients direct access to the China A-Share stock market. The fund is also registered in Italy and in other European countries (Austria, Denmark, Finland, France, Ireland, Luxembourg, the Netherlands, Norway, Spain and Sweden), where it is therefore available only to professional investors.
China market A Shares include shares of local companies listed on the Shanghai or Shenzen Stock Exchange and represent the largest segment of the Chinese stock market, as well as one of the best performing globally in 2014, when the Shanghai Composite Index recorded a growth of 58%. However, direct purchase of A Shares is only allowed to Chinese nationals and international investors can access them through a limited and restricted number of regulated channels, thus limiting market access for many.
The iShares MSCI China UCITS ETF offers exposure to China A Shares through BlackRock's quota as a qualified overseas Renminbi investor. It is the only ETF that tracks the MSCI China A International Index, which represents a large and diversified basket of over 300 large and mid-cap stocks.
The fund is physically replicated and the TER is 0,65%, lower than other physically replicated ETFs that allow access to Chinese A Share shares available to international investors.
Tom Fekete, Head of EMEA Product at iShares -BlackRock's ETF platform-, commented: “Investor interest in China is high and showing no signs of abating. The world's second-largest economy is increasingly opening up its stock market to more foreign investment, and this ETF offers a new option for accessing Chinese equities. We chose the MSCI index very carefully for its diversified basket of A Shares and constructed the ETF using physical replication, a methodology favored by investors. This fund offers high quality and low cost exposure to one of the few global stock markets that is difficult to access for international investors”.
The iShares MSCI China A UCITS ETF expands the range of ETFs that allow international investors to gain exposure to the Chinese equity market, including the iShares China Large Cap UCITS ETF, which tracks the FTSE China 50 Index and offers access to the Chinese company listed on the Hong Kong Stock Exchange.
