NEW YORK, June 2 Vanguard Group said on Tuesday
it plans to add onshore Chinese equities, known as A-shares, to
its broad emerging markets exchange-traded fund, making it the
first broad-based emerging markets ETF to gain direct exposure
to the onshore market.
The Vanguard FTSE Emerging Markets ETF, which has
some $50 billion in assets and ranks among the biggest
U.S.-listed ETFs, will add the Chinese shares as a part of an
expansion of several of Vanguard's international index funds to
broader FTSE benchmark indexes, the company said.
China's so-called A-shares are the renminbi-denominated
shares of companies incorporated in mainland China and traded on
the Shanghai and Shenzhen exchanges. So far only a handful of
U.S.-listed China-focused ETFs have direct exposure to the
"The addition of China A-shares ... will provide investors
with more complete exposure to a key emerging economy and the
second-largest stock market in the world by market cap,"
Vanguard said, noting that China accounts for some 20 percent of
global trade and 7 percent of global consumption.
Vanguard said it recently received a quota for China
A-shares, which will provide exposure to the country's largest
The Vanguard ETF change comes as the Vanguard Emerging
Markets Stock Index Fund, of which the ETF is a share class,
makes the benchmark change. China A-shares will represent 5.6
percent of the new benchmark for the emerging markets index
The transition to the new benchmarks is expected to begin in
late 2015, the company said.
(Reporting by Ashley Lau in New York; Editing by Alan Crosby)