The iShares MSCI China A UCITS ETF listed on the London Stock Exchange today, and will purchase and hold underlying stocks in the Shanghai and Shenzhen stock exchanges that comprise the index.
The fund will use part of the investment quota attributed to BlackRock last April when it acquired its renminbi qualified foreign institutional investor (RQFII) licence, which permits its direct investment into China’s domestic capital markets.
Without a licence, the direct purchase of A shares is open only to Chinese nationals and foreign investors through a number of tightly controlled and regulated channels.
The fund has a total expense ratio of 0.65%, lower than comparable physically replicating China A share ETFs open to international investors.
Tom Fekete, head of product for iShares in EMEA, said investors’ interest in China is rising and does not show any signs of slowing down.
“The world’s second largest economy is increasingly opening its stick market to greater foreign investment, and this ETF provides investors with a new option for accessing Chinese shares.
“We selected the MSCI index very carefully for its diversified basket of A shares, and built the ETF using the physical replication model that investors tell us they prefer.
“This fund offers high quality, low-cost exposure to one of the few global equity markets that are truly difficult for international investors to enter.”
The news comes on the same day as Lipper’s announcement that BlackRock, with net sales of €6.8bn, was the best-selling group of long-term funds for February.
Meanwhile, new research by BlackRock has today revealed that exchange traded products globally gathered £36.1bn over Q1 to lift flows to $97.2bn, nearly triple the total in Q1 2014.
Currency-hedged equity also had its best month ever in March, accounting for $13.4bn spread across Europe, EAFE and Japan exposures as investors anticipated further strengthening of the U.S. dollar.
