First UCITS ETF to provide access to all China equity share classes
- WisdomTree in partnership with ICBC Credit Suisse Asset Management (International) Company Limited (“ICBCCS”), has launched its first UCITS ETF tracking the all-inclusive S&P China 500 Index that offers broad coverage of all classes of China equities.
- The new ETF is a physical fund that owns the underlying securities, including onshore listed A-shares. This is the first European-listed ETF to combine exposure to all China equity share classes in a single UCITS ETF, thereby offering investors a unique and efficient market access tool.
- China is the world’s second largest economy and the country with the highest weight in emerging market indices, and the eighth largest weight in global all country benchmarks.
- The S&P China 500 Index is unique in both including the 500 largest, most liquid Chinese companies whilst using a rule-based stock selection process to target the sector weights that are representative of the broad universe of Chinese equities.
WisdomTree, the exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor today announced the launch of the ICBCCS WisdomTree S&P China 500 UCITS ETF Class B USD listed in USD (CHIN) on the London Stock Exchange. The new ETF is also available with a listing in GBP (CHIP).
WisdomTree and ICBCCS recently agreed to a global product partnership in which the companies can jointly launch, market and distribute ETFs tracking the S&P China 500 Index around the world.
The S&P China 500 Index uses a rule-based process to measure the world’s second largest economy and equity market. The index captures the key characteristics of the total Chinese equity market –including A-shares and H-shares, and other international listings – by using predominantly large and liquid securities. The use of a sector-based stock selection process then allows the index to reflect the sector allocation at the broad China index level. This methodology allows the index to be more reflective of the evolution of the Chinese economy than other equity indices, which are limited in the share classes that they include.
Nizam Hamid, ETF Strategist at WisdomTree Europe, said:
“Market access to Chinese equities has long been an issue for investors and the creation of a UCITS ETF that covers all the relevant share classes in a single product brings substantial benefits. It represents a cost effective means of allocating to a broad index whilst removing the operational and administrative burdens often associated with accessing A-shares. The collaboration with ICBCCS means that European investors have a transparent and liquid single product to invest in China.”
“S&P Dow Jones Indices is delighted to have licensed the S&P China 500 Index to both WisdomTree and ICBC Credit Suisse,” notes Alex Matturri, Chief Executive Officer at S&P Dow Jones Indices. “Chinese equities remain a key part of long-term investment strategies and we are committed to provide independent and transparent benchmarks to meet the demands of investors around the world.”
Laura Lui, Head of Index & Quantitative Investment of ICBC Credit Suisse Asset Management (International) commented:
“The global product partnership between ICBCCS and WisdomTree will bring significant opportunities to both of our companies. WisdomTree has an established presence in the ETF world and an impressive track record as an ETF issuer. This complements ICBCCS’s in-depth understanding of the Chinese markets, as jointly we bring to investors pioneering solutions for diversified, transparent and efficient tools for accessing China opportunities.”
The details of the ICBCCS WisdomTree S&P China 500 UCITS ETF are:
|Fund||Ticker||ISIN||Base Currency||Listing Currency|
|ICBCCS WisdomTree S&P China 500 UCITS ETF Class B USD||CHIN
|ICBCCS WisdomTree S&P China 500 UCITS ETF Class B USD
State Street Bank S.A. in Luxembourg has been appointed to provide fund administration and custody services for the Luxembourg domiciled ETF. The TER of the fund is 0.75% p.a.