New Irish-domiciled fund opens up China to European investors

The London-listed ETF will track the top 50 companies in mainland China

The London-listed CSOP Source FTSE China A50 UCITS ETF will track the top 50 companies in mainland China. Photograph:  Reuters

The London-listed CSOP Source FTSE China A50 UCITS ETF will track the top 50 companies in mainland China. Photograph: Reuters

 

A new Irish-domiciled exchange-traded fund (ETF) is to offer European investors direct access to China’s blue-chip stocks for the first time.

ETFs are portfolios of stocks, bonds or other assets which are traded on stock exchanges just like the underlying equities.

They allow investors the ability to track markets at a low cost without having to pick individual stocks.

The London-listed CSOP Source FTSE China A50 UCITS ETF, launched today by ETF-provider Source in conjunction with Hong Kong-based CSOP Asset Management, will track the top 50 companies in mainland China.

The fund, which will be open to both retail and institutional investors, had an initial investment of 1.42 billion yuan (€173 million), Source said.

China is gradually opening its financial markets and has given quota-driven access to mainland markets to a number of asset managers, including CSOP Asset Management.

“This is another significant milestone for the Irish funds industry. It is also a clear demonstration that Ireland and its funds industry remains ahead of the curve when it comes to enabling investment firms to broaden their distribution reach through innovative, well-structured and efficient products,” chief executive of the Irish Funds Industry Association (IFIA) Pat Lardner said.

“The IFIA and its members continue to spend significant time working with international investment managers of all sizes to allow them to capitalise on Ireland’s reputation for speed, efficiency and service excellence, helping them break new ground with their investor solutions,” he added.

Ireland is already the leading European domicile for ETFs representing approximately 32 per cent of the overall market, servicing over €62 billion of the €195 billion European ETF market.

Ted Hood, chief executive of Source said: “Ireland is a natural home for this innovative, new product due to its reputation for regulatory excellence, world-class service levels and expertise in ETFs.”