ASSET management firm CSOP Asset Management has launched the first yuan exchange-traded fund (ETF) tracking Shenzhen’s ChiNext index, providing foreign investors with a new channel to diversify their portfolios.

    The fund that invests in the 100 biggest companies listed on the ChiNext board in terms of market value, or 47 percent of the total, makes use of CSOP’s Renminbi Qualified Foreign Institutional Investors (RQFII) quota.

    Before this fund, most RQFII ETFs track major stock indices in China’s equity market, such as CSOP A50 ETF that follows the 50 biggest blue chip companies and China AMC CSI300 ETF that follows the 300 largest and most liquid stocks in China.

    “Asset allocation demand has become more complicated, as investors are not content with having access to China, but hope to secure returns from more balanced asset categories,” said Jack Wang, head of institutional clients at CSOP Asset Management, the Hong Kong subsidiary of Shenzhen-based China Southern Asset Management Co.

    Wang believes this fund will see demand from both long-only funds that want to have more exposure to China as well as investors who are interested in shorting the ChiNext index, which has more than doubled so far this year. (SD-Agencies)