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Chinese asset firm CSOP to launch U.S. fund targeting China stock market
January 28, 2014 / 9:46 AM / 4 years ago

Chinese asset firm CSOP to launch U.S. fund targeting China stock market

HONG KONG, Jan 28 (Reuters) - Chinese asset management firm CSOP said on Tuesday it was collaborating with London-based Source to apply for an exchange-traded fund (ETF) in the United States, following their first such product launch in London earlier this month.

It will be the second ETF listed in the United States under the Renminbi Qualified Foreign Institutional Investor (RQFII) scheme, after Deutsche Asset & Wealth Management and Harvest introduced a similar fund in December.

CSOP, the biggest RQFII asset manager with 34.1 billion yuan ($5.64 billion) of quotas, said in a statement the new ETF product aimed to track the performance of the FTSE China A50 Index, which comprises the top 50 shares in mainland China.

Its London ETF was well received thanks to European investors’ confidence in China’s economy and currency. The firm has started to apply for new quotas for the fund as 97 percent of the 1.5 billion yuan quota was used up just two weeks after the launch.

The RQFII scheme, launched in 2011, allows financial institutions to use offshore yuan to invest in the Chinese mainland’s securities markets, including stocks, bonds, and money market instruments.

As of Jan. 27, a total of 167.8 billion yuan in quotas had been approved for 57 RQFII licences under the 270 billion yuan quota granted to Hong Kong.

CSOP said earlier it also won approval to launch the first Chinese government bond exchange-traded fund (ETF) under the RQFII scheme. The fund will be listed and traded in the Hong Kong Stock Exchange in early February.

Meng Xiaoning, fund manager of the bond ETF, expected China’s five-year treasury bond to carry a yield of around 4 percent in the first half of this year, and 3.8-4.1 percent for the whole year.

The money manager, which managed $5.7 billion assets as of end-2013, was granted a 4 billion yuan RQFII quota by the State Administration of Foreign Exchange (SAFE) in January.

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