The Shanghai stock market is languishing at a three-year low after falling almost 9 per cent since January but interest in China-focused exchange traded funds is growing strongly with investors and providers taking advantage of new rules that are helping to accelerate the development of China’s ETF market.
Assets in China ETFs have risen from just $12m in 2002 to $38.8bn at the end of August, according to Deutsche Bank. Over the same period, the number of ETFs available to investors has risen from just one to 138.
A major impetus for the development of the China-focused ETF market this year has been the decision of regulators to permit the launch of cross-border physical ETFs for the mainland and Hong Kong as well as cross-market ETFs within China that can invest in Shanghai and Shenzhen markets at the same time.